ABC Limited closes its books and prepares financial statements at the end of each month. The company incurred the below transaction during June 2023.

Date	Transaction
6	issued sales invoice no. 721 for $320,000 for sales on 60 day credit to Roger Limited. The cost for these goods was $290,000 on 30 days credit from Lo Enterprises.
11	received a cheque from L.M. Limited total $200,000; settlement of sales invoice no. 222 in May.
15	issued cheque no. 584 to Sunshine Limited for $285,000; payment of suppliers' invoice in May.
18	received $125,500 in cash from RM Limited in full settlement of his account receivable of sales in May.
22	Auto payment of sale commission of $25,000 incurred from 1 to 20 June.
23	issued invoice no. 722 for cash sale, $260,000 (cost of these goods was $170,000 and paid in June).
26	issued cheque no. 585 to CT Limited total $245,000; settlement of a printer charge for May.
30	Incurred salary expenses of $75,000 in June to be paid in July.

1. prepare the journal entries of all the transactions from 1 June 2023 to June 2023.

2. Prepare two income statements for ABC Limited for June 2023. one statement using the accrual basis, the other using the cash basis, both according to the format as below:

3. will you use the cash basis or accrual basis of accounting to prepare the income statement? Give a complete explanation of your reason.

income statement accrual basis cash basis

Sales

Less: Expenses

cost of sales

salaries

commission

printing charges

Total expense

Net profit/ loss