Which statement is true regarding the cash basis of accounting? a. expenses are reported in the same period as the revenues to which they relate. b. revenues are reported in the period in which cash is received, and expenses are reported when cash is paid out. c. the cash basis of accounting is used by most large businesses to provide accurate financial statements for users. d. revenues are reported in the period in which a service has been performed or a product has been delivered.

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)