Book Name: Principles of Managerial Finance - 180 Day Option,14th Edition
Lawrence J. Gitman
P1–2 Accrual income versus cash flow for aperiod  Thomas Book Sales, Inc., suppliestextbooks to college and university bookstores. The books areshipped with a proviso that they must be paid for within 30 daysbut can be returned for a full refund credit within 90 days. In2014, Thomas shipped and billed book titles totaling $760,000.Collections, net of return credits, during the year totaled$690,000. The company spent $300,000 acquiring the books that itshipped.
- Using accrual accounting and the preceding values, show thefirm’s net profit for the past year.
- Using cash accounting and the preceding values, show the firm’snet cash flow for the past year.
- Which of these statements is more useful to the financialmanager? Why? (please provide me with a detailed calculation for myreference, thank you!)
