Cash-Basis Income During the month of March, Dallway Corporation received $400,000 of inventory, and it paid suppliers $205,000 for inventory received and sold in February and $195,000 for inventory received in March. The total cost of inventory sold during the month of March was

$500,000. Sales of $690,000 were reported in March, with collections from customers totaling $335,000 from March sales and $80,000 from February sales.

a. If Dallway had no other cash receipts or payments during March, compute the amount reported as net income using the cash basis.

b. How well does cash-basis income appear to represent the results of operations for Dallway Corporation for March?