Response to the following problem:
The following data relate to Jones Company for the year ended December 31, 2011:
Sales on credit $80,000
Cost of inventory sold on credit 65,000
Collections from customers 60,000
Purchase of inventory on credit 50,000
Payment for purchases 55,000
Cash collections for common stock 30,000
Dividends paid 10,000
Payment to salesclerk 10,000
Required:
a. Determine income on an accrual basis.
b. Determine income on a cash basis.