Problem 4-18 (LO. 2) Selma operates a contractor's supply store. She maintains her books using the cash method. Selma wants to know whether the accrual basis of accounting would be preferable for her business. At the end of 2020, Selma's accountant computes her accrual basis income that is used on her tax return. For 2020, Selma reported cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2019 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2020, she held $250,000 in accounts receivable from customers, all from 2020 sales. a. Compute Selma's accrual basis gross receipts for 2020. b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2020 was $1,300,000. At the end of 2019, she had merchandise on hand with a cost of $150,000. At the end of 2020, the cost of merchandise on hand was $300,000 Compute Selma's gross income (profit) from merchandise sales for 2020. The cost of goods sold for 2020 under the accrual method is $ . Therefore, the gross profit from merchandise sales for 2020 under the accrual basis is $