31 Based on the accrual basis of accounting, determine when the following independent companies shou 1. Starbucks sells you a $25 gift card for your friend's birthday in February. Your friend spends the In its first year of operations, Harris Construction earned $39,000 in revenues and received $33,000 cash from customers. The company incurred expenses of $22,500, but had not paid for $2,250 of them at year-end. CHAPTER 3 Adjusting Accounts for Financial Statements QS 3-2 Accrual accounting LO3 recognize revenue. card on coffee and baked goods in March. QS 3-3 Accrual and cash accounting LO3 addition, Harris prepaid $3,750 for expenses that would be incurred the next year. 1. Calculate the first year's profit under the cash basis. 2. Calculate the first year's profit under the accrual basis. 3. What is the difference? 2. You paid your university tuition in September for the Fall semester that runs from September to Decembe