Nicole’s business uses the accrual method of accounting and accounts for inventory with specific identification. In year 0, Nicole received a $4,500 payment with an order for inventory to be delivered to the client early next year. Nicole has the inventory ready for delivery at the end of year 0 (she purchased the inventory in year 0 for $2,300).

a) When does Nicole recognize the $2,200 of gross profit ($4,500 revenue minus

$2,300 cost of the inventory) if she uses the full-inclusion method?

b) When does Nicole recognize the $2,200 of gross profit from the inventory sale if she uses the deferral method?

c) How would Nicole account for the inventory-related transactions if she uses the cash method of accounting and her annual sales are usually less than

$100,000?

d) How would Nicole account for the inventory-related transactions if she uses the cash method of accounting and her annual sales are usually over

$2,000,000 per year?