2 of 10 View Policies Current Attempt in Progress In its first year of operations, Cullumber Company recognized $36,400 in service revenue, $7,800 of which was on account and still outstanding at year-end. The remaining $28,600 was received in cash from customers. The company incurred operating expenses of $20,540. Of these expenses, $15,600 were paid in cash: $4,940 was still owed on account at year-end. In addition, Cullumber prepaid $3,120 for insurance coverage that would not be used until the second year of operations. (a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the accrual basis of accounting. Cash Basis Net Income Accrual Basis (b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers? eTextbook and Media Save for Later Attempts: 0 of 3 used Submit