Moore, Corp. completed the following selected transactions and prepared these adjusting entries during May:

May 1 Prepaid insurance for May through July, $2,700.

3 Performed service on account, $2,500.

6 Purchased office furniture on account, $900.

8 Paid property tax expense, $500.

12 Purchased office equipment for cash, $1,500.

18 Performed services and received cash, $3,500.

23 Collected $800 on account.

26 Paid the account payable from the May 6 transaction.

30 Paid salaries expense, $1,300.

31 Recorded an adjusting entry for May insurance expense related to the

May 1 transaction.

31 Recorded an adjusting entry for unearned revenue now earned, $1,100.

Requirements

1. State whether the transaction would increase revenues, decrease revenues, increase expenses, decrease expenses, or have no effect on revenues or expenses. If revenues or expenses are affected, give the amount of the impact on revenues or expenses for May. Use the following format for your answer.

2. Compute May net income or net loss under the accrual basis of accounting.
3. State why the accrual basis of accounting results in an accurate measurement of income.

Transcribed Image Text:

Revenues and Expenses for Impact on Revenues or Expenses Increase Revenues May Date $ Effect on Revenues or Expenses May XX $XXX