HELPPPPPP PLEASEEEE! In its first year of operations, Wildhorse 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, Wildhorse 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.

$($b$)$ Which basis of accounting $($cash or accrual$)$ provides more useful information for decision$-$makers?

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