Based on the following transactions, calculate the revenues, expenses and net income that would be reported (a) on the cash basis and (b) on the accrual basis:

1. Credit sales to customers totalled $35,000. 2. Cash sales totalled $115,000. 3. Cash collections on account from customers totalled $30,000. 4. Cost of goods sold during the period was $85,000. 5. Payment made to suppliers of inventory totalled $75,000. 6. Wages of $32,500 were paid during the year. In addition, wages of $2,500 remained unpaid at year end; there were no wages unpaid at the beginning of the year. 7. Halfway through the year, a one-year insurance policy was purchased at a cost of $1,000.