Sample Cafe Income Statement, Cash Basis Month Ended January 31, 20xx Revenue $40,000 Excludes $2,200 in receipts not yet deposited. Equipment Purchased last month for $12,000 (5 year life). Insurance $600 Premium for whole year. Rent and Utilities $4,500 Includes $2,500 in rent/utility deposits. Coffee Purchased $2,300 Includes $100 worth thrown away. Cups Purchased $1,600 $700 still in inventory. Payroll $14,800 Owe $2,400 in taxes. Interest on Loan $200 Paid mid-month. Advertising/Promotion $12,000 |$3,000 each week. Total Expenses Net Income 2. Use the notes from the cash basis income statement for Sample Cafe in question 1 to redo it on an accrual basis. Be sure to break out cost of goods sold from the other expenses, and include a line item for the gross margin. 3. Compare the results of the two income statements in questions 1 and 2. Were any items missing or overstated using one approach as compared to the other? Which system more accurately reflects the results for the month, and why