The J. C. Spangle catalog company began business on January 1, 2012. Activities of the company for the first two years are as follows:

a. Prepare income statements for 2012 and 2013, assuming that the company uses the accrual basis of accounting and recognizes revenue at the time of sale.
b. Prepare income statements for 2012 and 2013, assuming that the company uses the accrual basis of accounting and recognizes revenue at the time of cash collection following the installment method of accounting. “All Expenses Other Than Merchandise,
Paid in Cash” are periodexpenses.

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2013 2012 Sales, All on Account. $300,000 $200,000 Collections from Customers: On 2012 Sales.. On 2013 Sales. . 110,000 12,000 240,000 90,000 180,000 60,000 32,000 All Expenses Other Than Merchandise, Paid in Cash.... 44,000