(4 marks) John has to write the report to the boss and to explain him what the difference between cash and accrual basis of accounting is. He wants to know what accounting basis is more suitable for measuring real performance of the company. Because his business faces the crisis COVID 19 situation The accountant John Smith also has to determine net purchases of the small merchadise company he works for He has information on beginning balance in Inventory ($3,000). he found the records how much inventory was returned (5500), how much in allowances was provided by supplier ($200) and also they earned some discount (5600), because they paid on time within a discount period. They made woorders in the amount od 15,000. The goods was delivered What are nel purchases? How much was sold i merchandise inventory on hand is $2007 Conditions of delivery wass FOB, shipping point. He wonders whether transport costs $400 should be included into purchase cost of Inventory. Please advice him