The following data relate to Jones Company for the year ended December 31, 2009: Sales on credit

Question:

The following data relate to Jones Company for the year ended December 31, 2009:

Sales on credit …………………………………….. $80,000

Cost of inventory sold on credit ………………….. 65,000

Collections from customers ……………………….. 60,000

Purchase of inventory on credit …………………… 50,000

Payment for purchases ……………………………. 55,000

Cash collections for common stock ………………. 30,000

Dividends paid …………………………………… 10,000

Payment to salesclerk ……………………………. 10,000

Required

a. Determine income on an accrual basis.

b. Determine income on a cash basis.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...