Reference no: EM132971988

Question - DEF Company provided the following data for the year ended December 31, 2020:

Sales 2,500,000

Sales on account 850,000

Cash purchases of merchandise 1,700,000

Credit purchases of merchandise 500,000

Expenses paid in cash 700,000

Accounts receivable:

January 1 300,000

December 31 400,000

Accounts payable:

January 1 150,000

December 31 300,000

Merchandise inventory

January 1 500,000

December 31 700,000

Accrued expenses, December 31 40,000

Prepaid expenses, December 31 30,000

Furniture and fixtures

Total cost 1,000,000

Estimated life 10 years

Acquired on July 1, 2020 200,000

Interest received 50,000

Accrued interest receivable, January 1 20,000

Required - Prepared Income Statement using cash basis and accrual basis?