The Income Statement provides a summary of revenues and expenses over a period of time, such as a month, quarter, or year. It provides information about the profitability of a business during the period specified. 1. The following is a cash basis income statement for Sample Cafe's first month of operation. Calculate the total expenses and net income for the business. Sample Cafe Income Statement, Cash Basis Month Ended January 31, 20XX Item Value Note Revenue $40,000 Excludes $2,200 in receipts not yet deposited. Equipment SO 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 and utility deposits. Coffee Purchased $2,300 Includes $100 worth thrown away. Cups Purchased $1,600 8700 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 Continued on next page... Student or Team Name: 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