Evaluation of Cash-Basis Net Income Toz Company reports sales revenue and operating expenses on a cash basis. How will each of the following affect the accuracy with which cash-basis net income reports the monthly operating results of Toz?

a. A building used as a warehouse is purchased for $350,000 rather than continuing to pay monthly rent for its use.

b. All of the materials needed for production for the year are purchased in early January because prices are at a low at that time of year. Under normal circumstances, materials are purchased monthly.

c. At present, payment from customers 1s received within 30 days of the time the product is shipped. Toz is considering requiring customers to make payment by wire transfer on the day the order is shipped.

d. Income taxes have been paid annually in February. Toz is considering making monthly payments.

e. Employees currently are paid on the 10th of the month for work done in the previous month. The company is considering changing its procedures so that it can make payment on the last day of the month for work done that month.