In the course of your examination of the books and records of Hickory Company, you find the following data: Salariessearned! byaemPloVeeSulme200S a: yan eis) ey ran erie Maes esac ea eee $ 53,000 Salaniesspalasin2003:hs nein ote. eaences wicca og ceccne OVE creecgcetn solv ee wareemce n smeekt ec gee 55,000 ihotalisalestrevenUie: innZOOsi: ctcicce tio. ct ceeoie sete ter sai aie tae orca en ae eee ee 838,000 Cashcollected trom sales in 2003... 0c. sce ee cuts cw. ws wh eee ure ee {900,000} Wtilitiestexpense incurred injZ003) sac cscwss te ce ede terns oe ate) ote alters cele) ae 5,000 Wemity: Bills aiden 2003, qe 0 ce: fe keroets spre tcee FiO ee euatte eh ees 1e Oe eee 4,8007 Gosteofugoodsisoldimy2003 wa wens tet. hae earch Peck bee§. coe esa a 532,000 Gashppaidionypurchasesiin, 2003. ccm ecen ee eee te ite een ne hele 411,000 InventonvsatiDecembermole 200i n-) vena cere eden eel scale eat ence eee 320,000 TaxcaSSCSSMeNtHOm200 Sia. te te nicer els Mak cae Cr emp ber eee sca ie ac nee keen 5,000 TAXES AIG Hs2OOSe eke. he ook ents oe We ony Ae gangs © colic Wenn ee Manne 4,900? Reniexpense fOr 2003) seme = ce creche cian 0 aie ease geet ieecete thats el ore ope eee 30,000 Reatard im2O0 se ee fr dee ainerincoegicghl canta ee aamerats ote er eee ne eee (25,000. 1. Compute Hickory’s net income for 2003 using cash-basis accounting. Compute Hickory’s net income for 2003 using accrual-basis accounting. 3. Interpretive Question: Why is accrual-basis accounting normally used? Can you see any opportunities for improperly reporting income under cash-basis accounting? Explain.