(a) Prepare an accrual-based income statement for Tazza for the period ended 30 June.

(b) As a user of financial statements, critique why accrual accounting is preferred to cash accounting to measure financial performance.

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TAZZA Income Statement For the 12-month reporting period ended 30 June Cash Basis Adjustments Accrual Basis +4 800 +32 000 +9960 - 38 000 Sales 277 400 282 200 Inventory purchased Gross profit Less expenses Salary and wages Rent 164 000 113 400 167 960 114 240 28 400 9200 573 8 560 7200 18 800 4 760 36 747 28 400 9 200 3 440 5 600 -2 867 +2 960 + 7 200 surance Advertising Depreciation Administration Interest Profit 18 800 4 760 43 200