(Learning Objective 1: Linking accrual accounting and cash fl ows) During 20X6 Nebula Corporation made sales of €4,800 (assume all on account) and collected cash of

€4,900 from customers. Operating expenses totaled €1,100, all paid in cash. At year-end, 20X6, Nebula customers owed the company €300. Nebula owed creditors €500 on account.

All amounts are in millions.

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

■ Income statement

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