Current Attempt in Progress Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example. (If an amount reduces the account balance then enter with negative sign preceding the number e.g.-15,000 or parentheses e.g. (15,000).) Cash -$110 Net Income $0 (a) Purchased $110 of supplies for cash. (b) Recorded an adjustment to record use of $31 of the above supplies. (c) Made sales of $1,430, all on account. (d) Received $880 from customers in payment of their accounts. (e) Purchased equipment for cash, $2,750. (f) Recorded depreciation of building for period used, $660. e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer View Policies Current Attempt in Progress In its first year of operations, Cullumber Company recognized $33,600 in service revenue, $7,200 of which was on account and still outstanding at year-end. The remaining $26,400 was received in cash from customers. The company incurred operating expenses of $18,960. Of these expenses $14,400 were paid in cash; $4,560 was still owed on account at year-end. In addition, Cullumber prepaid $2,880 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 Accrual Basis Net Income $ $ (b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers? Current Attempt in Progress Jennifer Davis is the new owner of Jennifer's Computer Services. At the end of July 2022, her first month of ownership, Jennifer is trying to prepare monthly financial statements. She has the following information for the month. 1. 2. 3. At July 31, Jennifer owed employees $990 in salaries that the company will pay in August On July 1, Jennifer borrowed $18,000 from a local bank on a 10-year note. The annual interest rate is 9%. Service revenue unrecorded in July totaled $1,440. Indicate how adjustments for these three situations would affect the accounting equation by completing the following table, which includes a sample accrual for a utility bill received August 1 for services received during July 2022. Assets No Effect Liabilities Increase Stockholders' Equity (Rev. Exp.) No Effect Increase Sample 1 2. + 3. + +