Business for its first year according to the cash

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Reference no: EM131116904

You started a new business one year ago. You've been very busy dealing with so many problems that you haven't had time to sit down and look at whether you made a profit or not. You haven't run out of cash (which for a start-up venture is quite an accomplishment), but you understand that the sustainability of the business depends on making a profit. The following two summaries present cash flow information for the year and information about two assets and a liability at year-end:

Revenue and Expense Cash Flows For First Year

$558,000 cash receipts from sales

$375,000 cash payments for purchases of products

$340,000 cash payments for other expenses

Two Assets and a Liability at Year-End

$52,000 receivables from customers for sales made to them during the year

$85,000 cost of products in ending inventory that haven't yet been sold

$25,000 liability for unpaid expenses

Compare the profit or loss of your business for its first year according to the cash- and accrual-basis accounting methods. Show in an income statement.

Reference no: EM131116904

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