E3-19A (Learning Objective 1: Explain how accrual accounting differs from cash-basis accounting) During 2012, Consolidated Corporation made sales of $4,300 (assume all on account) and collected cash of $4,500 from customers. Operating expenses totaled $1,200, all paid in cash. At year end, 2012, Consolidated customers owed the company $900. Consolidated owed creditors $1,000 on account. All amounts are in millions.
1. For these facts, show what Consolidated reported on the following financial statements:
? Income statement
? Balance sheet
2. Suppose Consolidated had used the cash basis of accounting. What would Consolidated have reported for these facts? (Harrison 182)