Busby Corp. uses cash-basis accounting for its records. During 2013, Busby collected $780,000 from its customers, made payments of $420,000 to its suppliers for inventory, and paid $170,000 for administrative costs. Busby wants to prepare accrual-basis financial statements. In gathering information for the accrual-basis financial statements, Busby discovered the following:
1. Customers owed Busby $40,000 at the beginning of 2013 and $36,000 at the end of 2013.
2. Busby owed suppliers $19,000 at the beginning of 2013 and $28,000 at the end of the 2013.
3. Busby’s beginning inventory was $63,000 and its ending inventory was $47,000. What should Busby’s Gross Profit be on accrual basis?