ABC Company accrual basis profit is computed as follows:

Sales $ 2,500,000

Cost of Sales:

Inventory, Jan.1 $ 600,000

Net purchases 1,400,000

Cost of gods available for sale 2,000,000

Inventory, Dec.31 (400,000) 1,600,000

Gross Profit $ 900,000

Other Income 100,000

Operating expenses (700,000)

Profit for the year $ 300,000

Additional Information:

• * Operating expenses include depreciation of $70,000
• * Otherincomeincludesinterestincomeof$80,000,$10,000ofwhichpertainstoamortizationofdiscountoninvestmentinbonds.
• * Accounts receivable decreased by $100,000, prepaid expenses increased by $50,000, accrued expenses increased by $20,000, and accounts payable decreased by $60,000

Requirement: Compute for ABCs Cash Basis Profit.

ABC Company accrual basis profit is computed as follows: Sales $ 2,500,000 Cost of Sales: Inventory, Jan.1 $ 600,000 Net purchases 1,400,000 Cost of gods available for sale 2,000,000 Inventory, Dec.31 (400,000) Gross Profit 1,600,000 $ 900,000 Other Income 100,000 Operating expenses (700,000) Profit for the year $ 300,000 Additional Information: Operating expenses include depreciation of $70,000 Other income includes interest income of $80,000, $10,000 of which pertains to amortization of discount on investment in bonds. Accounts receivable decreased by $100,000, prepaid expenses increased by $50,000, accrued expenses increased by $20,000, and accounts payable decreased by $60,000 Requirement: Compute for ABC's Cash Basis Profit