Chelsea opens a retail store. Her sales during the first year are $700,000, of which $60,000 has not been collected at year-end. Her purchases are $550,000. She still owes $40,000 to her suppliers, and at year-end she has $45,000 of inventory on hand. She incurred operating expenses of $150,000. At year-end she has not paid $55,000 of the expenses. Read the requirements Requirements a. and b. Compute her net income from the business assuming she elects the accrual method. Then compute her net income from the business assuming she elects the cash method. a. Accrual method Sales 700000 Cost of goods sold Gross profit Operating expenses Net income b. Cash method Sales Cost of Goods Sold Gross profit Operating expenses Net income Requirement c. Would paying the $55,000 she owes for operating expenses before year-end change her net income under accrual method of reporting? under the cash method? Paying the $55,000 she owes for operating expenses before year-end her net income under the accrual method, and her net income under the cash method