Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they must be paid for within 30 days but can be returned for a full refund credit within 90 days. In 2014, Thomas shipped and billed book titles totaling $830,000. Collections, net of return credits, during the year totaled $753,723. The company spent $333,143 acquiring the books that it shipped.

a.Using accrual accounting and the preceding values, show the firm's net profit for the past year.

b. Using cash accounting and the preceding values, show the firm's net cash flow for the past year.

c. Which of these statements is more useful to the financial manager? Why

A.The cash flow statement because it recognizes amounts that will not be collected and, as a result, will not contribute to the wealth of the owners.

B.The income statement because it recognizes revenues at the time of sale (whether payment has been received or not) and recognizes expenses when they are incurred.

C.The cash flow statement because it recognizes revenues at the time of sale (whether payment has been received or not) and recognizes expenses when they are incurred.

D.The income statement because it recognizes amounts that will not be collected and, as a result, will not contribute to the wealth of the owners.