You have been provided the following information about Lunenberg Ltd. (Lunenberg) as of the end of its first year of operations.
Cash collected from customers ..................$413,000
Amounts owing from customers ................39,200
Amounts paid to suppliers for business supplies......... 121,450
Amounts owing to suppliers for business supplies......... 28,350
Business supplies on hand at the end of the year......... 9,800
Amounts paid to employees for work done ...........61,250
Amounts owing to employees for work done............ 7,700
Advances paid to employees for work that will be done in the future.. 3,500
Depreciation of assets ....................14,000
Income taxes paid..................... 26,250

Required:
Calculate net income on the cash basis and on the accrual accounting basis for Lunenberg.
Explain why the cash basis and the accrual basis result in different amounts of income.