On December 31, 2003, Matt Morgan completed the first year of operations for his new computer retail store. The following data were obtained from the company’s accounting records: SalESiLOsCUStOIMErSWee win Wire cee ve Bocce Waa pe A a ot $197,000 Colléctions:trom@customersice ss see ar on oo OT Re Pes bn ck Oe 145,000 Interest earned and received on savings accounts............................ 2,500 Costiofigoods! sold . ic c.3 577) ce. ae a MEERA. it ke: yee ee see es 98,500 Amounts paid to;suppliers forinventonyasmnilaaeienennene sa. 2 nee 103,000 Wages owed tovemployees»at year-end . «.. saatta ante. as: Gen. sue eee 3,500 Wages paidttoremplovyoesnit caustics. ac 22 Re |. oS, ee 40,000 Utility bill.owed: to be.paid-néextumonth dendeeie weesA.... . . oo ns oa pee 1,100 Interest due at 12/31 on loan to be paid in March of next year................... 1,200 Amount paid for one and one-half years’ rent, beginning Jan. 1,2003............. 17,500 Income*taxes owedvat: year-end 0's! 20.4 pages eae rn ee ee ee ae 4,000 1. How much net income (loss) should Matt report for the year ended December 31, 2003, according to

(a) cash-basis accounting and

(b) accrual-basis accounting? 2. Which basis of accounting provides the better measure of operating results for Matt?