P1.4 Joe Fast started a mobile snack food service on January 2, 2006, investing $15,000 cash deposited in a bank account in the name of Fast Snacks. He purchased a second-hand, fully equipped truck. Joe operated on the cash basis of accounting, and at years end, he asks you to help him find his income or loss for the first year of operation. You have determined the following:

a. He purchased a used $24,000 truck that is depreciable at 20% per year. He paid $12,000 cash and financed $12,000 on a note at 8% interest.

b. He started the operation with $3,000 cash available.

c. He has $375 cash on hand and $28,454 cash in the bank at the end of the year.

d. His receipts for cash purchases of inventory for resale total $30,280.

e. The value of his ending inventory for resale is $624.

f. He paid $1,024 cash for all truck operating costs. In addition, he has an unpaid invoice for a recent truck repair in the amount of $280.

g. He paid $1,280 of interest on the truck loan.

h. He informed you that he took $1,625 a month for 12 months to use for living and other personal expenses.

You discover Joe kept no record of the cash sales he made during the year. Cash sales revenue must be determined from the information already noted. Show Joe how cash sales were determined and prepare an income statement using accrual accounting to show his operating income for the year.

P1.4 Joe Fast started a mobile snack food service on January 2, 2006, investing $15,000 cash deposited in a bank account in the name of Fast Snacks." He purchased a second-hand, fully equipped truck. Joe operated on the cash basis of accounting, and at year's end, he asks you to help him find his income or loss for the first year of operation. You have determined the following: a. He purchased a used $24,000 truck that is depreciable at 20% per year. He paid $12,000 cash and financed $12,000 on a note at 8% interest. b. He started the operation with $3,000 cash available. C. He has $375 cash on hand and $28,454 cash in the bank at the end of the year. d. His receipts for cash purchases of inventory for resale total $30,280. e. The value of his ending inventory for resale is $624. f. He paid $1,024 cash for all truck operating costs. In addition, he has an unpaid invoice for a recent truck repair in the amount of $280. g. He paid $1,280 of interest on the truck loan. h. He informed you that he took $1,625 a month for 12 months to use for living and other personal expenses. You discover Joe kept no record of the cash sales he made during the year. Cash sales revenue must be determined from the information already noted. Show Joe how cash sales were determined and prepare an income state- ment using accrual accounting to show his operating income for the year