(Learning Objective 1: Linking accrual accounting and cash flows) During 20X8 Consolidated Foods Corporation made sales of $4,000 (assume all on account) and collected cash of $4,100 from customers. Operating expenses totaled $800, all paid in cash. At year end, 20X8, Consolidated customers owed the company $400. Consolidated owed creditors $700 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?