Cassist Enterprises began operations on January 1, 2021. During 2021 and 2022, the company entered into the following transactions:

Instructions

a. Calculate revenue, operating expenses, and profi t for 2021 and 2022 using cash basis accounting.

b. Calculate revenue, operating expenses, and profi t for 2021 and 2022 using accrual basis accounting.

c. Which basis of accounting (cash or accrual) gives more useful information for decision-makers? Explain.

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2021 2022 1. Cash collected from customers during the year for services provided that year. 2. Accounts receivable at year end for services provided on account during the year. 3. Cash collected from customers for services provided on account the previous year. 4. Cash collected from customers for services to be provided the following year. 5. Services provided to customers who had paid cash in advance the previous year. 6. Cash paid for operating expenses incurred during the year. 7. Accounts payable at year end for operating expenses incurred on account during the year. 8. Cash paid to creditors for operating expenses incurred on account during the previous year. $50,250 $55,430 12,070 18,080 12,070 4,580 1,760 4,580 17,380 18,990 2,199 3,120 2,199