JOHNSON Enterprises began operating its consumer goods busin…
JOHNSON Enterprises began operating its consumer goods business on January 1, 2025. During 2025, JOHNSON sold merchandise totaling $5,670,000, of which $3,622,500 was collected in cash immediately and $2,047,500 was sold on account. Of the $2,047,500 sold on account, 65% was collected in cash after the sales date but before the end of the period. The company incurred expenses of $2,677,500 and made related cash payments of $2,735,000 in 2025. Compute Net Income (Loss) under (a) cash basis accounting and (b) the accrual basis accounting: