b. Same as (a) except the M makes an election under 461 (c). 7-27 Accrual versus Cash Method of Accounting. D operates a hardware store. For 2018, D's first year of operation, D reported the following items of revenue and expense: Cash receipts Purchase of goods on credit. Payments on payables .$140,000 90,000 82,000 By year-end, D had unsold goods on hand with a value of $25,000. a. Using the cash method of accounting, compute D's taxable income for the year. b. Using the accrual method of accounting, compute D's taxable income for the year Which method of accounting is required for tax purposes? Why? c