(Learning Objective 1: Linking accrual accounting and cash fl ows) During 20X6 Galaxy Corporation made sales of $4,100 (assume all on account) and collected cash of

$4,900 from customers. Operating expenses totaled $1,400, all paid in cash. At year-end, 20X6, Galaxy customers owed the company $700. Galaxy owed creditors $1,300 on account.

All amounts are in millions.

1. For these facts, show what Galaxy reported on the following fi nancial statements:

■ Income statement

■ Balance sheet 2. Suppose Galaxy had used the cash basis of accounting. What would Galaxy have reported for these facts?