Albritton Counseling Service, Inc., had the following selected transactions in October:

Oct. 1 Prepaid insurance for October through December, \(\$ 450\).

4 Purchased office equipment for cash, \(\$ 800\).

5 Performed counseling service and received cash, \(\$ 700\).

8 Paid advertising expense, \(\$ 300\).

11 Performed counseling service on account, \(\$ 1,200\).

19 Purchased office furniture on account, \(\$ 150\).

24 Collected \(\$ 400\) on account for the October 11 service.

26 Paid account payable from October 19.

29 Paid salary expense, \(\$ 900\).

31 Recorded adjusting entry for October insurance expense (see Oct. 1).

31 Debited unearned revenue and credited revenue to adjust the accounts, \(\$ 600\).

\section*{Required}

1. Show how each transaction would be handled using the cash basis and the accrual basis. Under each column 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 each method.
3. Indicate which measure of net income or net loss is preferable. Give your reason.

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Albritton Counseling Service-Amount of Revenue or Date Cash Basis Expense for October Accrual Basis