10. [Revenue recognition methods; income and cash flow ef- fects] The Able. Baker, Charlie, and David companies are identi- cal in every respect except for their revenue recognition methods: (i) Able recognizes sales when an order is received. (ii) Baker recognizes sales at the time of production (iii) Charlie recognizes sales at the time of shipment (iv) David recognizes sales when cash is collected. After the first year of operations, Charlie's closing inventory was $30,000 and accounts receivable was $50.000. Backorders, for which production had not yet started, were $10,000. Charlie rec- ognized sales of $100,000 for the year.

a. Assuming that each company charges a markup of 100% over cost, complete the following table: Sales Cost of goods sold Able Baker Charlie David $100,000 Net income

b. Ignoring income taxes, state which company will have the largest cash balance at year-end.

c. State which company will report the largest cash from operations.