M2-28. Computing and Comparing Income and Cash Flow Measures Penno Corporation recorded service revenues of $200,000 in 2020, of which $170,000 were on credit and $30,000 were for cash. Moreover, of the $170,000 credit sales for 2020, Penno collected $20,000 cash on those receivables before year-end 2020. The company also paid $25,000 cash for 2020 wages.

Its employees also earned another $ 15,000 in wages for 2020, which were not yet paid at year-end 2020.

(a) Compute the company's net income for 2020; and

(b) how much net cash inflow or outflow did the company generate in 2020? Explain why Penno's net income and net cash flow differ.