A) On December 31, 2017, Pack-and-Deliver Company completed its first year of operations. The following information has been provided for the year:

a. Sold packing supplies for $30,000 and provided $280,000 of delivery services.

b. All packing supplies sales were for cash.

c. Collected $212,000 of delivery service revenue.

d. Paid $15,000 cash to rent packing equipment, with $10,000 for rental in 2019 and the remaining amount for rental in 2020.

e. Spent $4,000 cash to repair delivery equipment during the year.

f. Bought packing supplies at a total cost of $46,000 and paid for $25,000 of these supplies. There were $20,000 of these supplies that have not yet been sold or used.

g. Paid employees $80,000 during the year.

h. Paid $16,000 for advertising for the year.

i. Used $14,000 in fuel for the delivery equipment.

j. Sold investments for $8,000 that had been purchased earlier in the year for $7,000.

k. Ordered $500 in spare parts and supplies.

l. Income tax expense for the year is $18,000.

1) Prepare an accrual basis income statement for Pack-and-Deliver Company for the year ended December 31, 2017. What would the net income be if Pack-and-Deliver used the cash basis instead? Explain why the net income reported on the income statement is usually not equal to net cash flows from operating activities on the statement of cash flows.