S3-1. (Learning Objective 1: Explain how accrual accounting differs from cash-basis accounting) Southeast Corporation made sales of $825 million during 2014. Of this amount, Southeast collected cash for all but $27 million. The companys cost of goods sold was $255 million, and all other expenses for the year totaled $325 million. Also during 2014, Southeast paid $350 million for its inventory and $255 million for everything else. Beginning cash was $75 million. Southeasts top management is interviewing you for a job and they ask two questions:

How much was Southeasts net income for 2014?

How much was Southeasts cash balance at the end of 2014?