In one year a company earned $100,000 in revenue all of which resulted from credit sales to its customers. Of that amount $85,000 had been paid by those customers. The same company incurred expenses in the amount of $80,000. Of that amount, $68,000 had actually been paid in cash by years' end.

1. Assuming the company uses accrual basis accounting, what is the net income?

2. Assuming the company uses cash basis accounting, what is the net income?