please guide me answering this practice Accrual income versus cash flow for a period. Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with aproviso that they must be paid for within 30 days. For simplicity, assume there are no returns and no bad debts (i.e., bookstores pay on time). This year, Thomasshipped and billed book titles totaling $830,000. Collections, during the year totaled $761,261. The company spent $317,057 acquiring the books that it shipped.a. Using accrual accounting and the preceding values, show the firm's net profit for the past year.b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year.c. Explain why the accrual and cash accounting methods show different net profits. How do the two profit figures provide different information to the financialmanager?a. Using accrual accounting and the preceding values, show the firm's net profit for the past year in the following table. (Round to the nearest dollar.)Accounting View(accrual basis)Thomas Book Sales, Inc.Income Statementfor the Year Ended 12/31Sales revenueLess: CostsNet profitb. Using cash accounting and the preceding values, show the firm's net cash flow for the past year in the following table. (Round to the nearest dollar.)Financial View(cash basis)Thomas Book Sales, Inc.Cash Flow Statementfor the Year Ended 12/31Cash inflowLess: Cash outflowNet cash flowc. Explain why the accrual and cash accounting methods show different net profits. How do the two profit figures provide different information to the financialmanager? (Select the best answer below.)A. A financial manager will find the income statement more useful. Accounting net income includes uncollected revenues that do not contribute to ownerwealth. Cash flows, not accounting profits, matter to shareholders. The income statement is more useful because it recognizes amounts that will not becollected and, as a result, will not contribute to the wealth of the owners.O B. A financial manager will find the cash flow statement more useful. Accounting net income includes uncollected revenues that do not contribute to ownerwealth. Cash flows, not accounting profits, matter to shareholders. The cash flow statement is more useful because it recognizes amounts that will not becollected and, as a result, will not contribute to the wealth of the owners.Oc. The income statement is more useful because it recognizes revenues at the time of sale (whether payment has been received or not) and recognizesexpenses when they are incurred.O D. The cash flow statement is more useful because it recognizes revenues at the time of sale (whether payment has been received or not) and recognizesexpenses when they are incurred.

Under Accrual basis of accounting revenue and expense booked in the period for which they relates,…

ual income för a period Book Sales, Inc., supplies textbooks to college and university books are shipped with a proviso that they must be paid for within 30 days. For simplicity, assume there are no returns and no bad debts (i.e., bookstores pay on time). This year, Thomas shipped and billed book titles totaling $830,000. Collections, during the year totaled $761,261. The company spent $317,057 acquiring the books that it shipped. a. Using accrual accounting and the preceding values, show the firm's net profit for the past year. b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year. c. Explain why the accrual and cash accounting methods show different net profits. How do the two profit figures provide different information to the financial manager? a. Using accrual accounting and the preceding values, show the firm's net profit for the past year in the following table. (Round to the nearest dollar.) Accounting View (accrual basis) Thomas Book Sales, Inc. Income Statement for the Year Ended 12/31

ual income för a period Book Sales, Inc., supplies textbooks to college and university books are shipped with a proviso that they must be paid for within 30 days. For simplicity, assume there are no returns and no bad debts (i.e., bookstores pay on time). This year, Thomas shipped and billed book titles totaling $830,000. Collections, during the year totaled $761,261. The company spent $317,057 acquiring the books that it shipped. a. Using accrual accounting and the preceding values, show the firm's net profit for the past year. b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year. c. Explain why the accrual and cash accounting methods show different net profits. How do the two profit figures provide different information to the financial manager? a. Using accrual accounting and the preceding values, show the firm's net profit for the past year in the following table. (Round to the nearest dollar.) Accounting View (accrual basis) Thomas Book Sales, Inc. Income Statement for the Year Ended 12/31

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement

Section: Chapter Questions

Problem 29P

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