Multiplex Medical Clinic completed these transactions during October:

Requirements 

1. Show how each transaction would be handled using the accrual basis of accounting. Give the amount of revenue or expense for October. Journal entries are not required. Use the following format for your answer, and show your computations: 

2. Compute October net income or net loss under the accrual basis of accounting.

3. Why is the accrual basis of accounting preferable to the cash basis? 

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Oct. 2 Prepaid insurance for October through December, $900. 4 Paid water bill, $200. 5 Performed services on account, $8,000. 9 Purchased medical equipment for cash, $1,400. 12 Received cash for services performed, $7,400. 14 Purchased office equipment on account, $300. 28 Collected $500 on account from October 5. 29 Paid salary expense, $1,100. 30 Paid account payable from October 14. 31 Recorded adjusting entry for October insurance expense (see October 2). 31 Debited unearned revenue and credited revenue in an adjusting entry, $700.