In its first year of operations, Blossom Company recognized $29,120 in service revenue, $6,240 of which was on account and still outstanding at year-end. The remaining $22,880 was received in cash from customers. The company incurred operating expenses of $16,432. Of these expenses, $12,480 were paid in cash; $3,952 was still owed on account at year-end. In addition, Blossom prepaid $2,496 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. Net Income Cash Basis $ Accrual Basis

In its first year of operations, Blossom Company recognized $29,120 in service revenue, $6,240 of which was on account and still outstanding at year-end. The remaining $22,880 was received in cash from customers. The company incurred operating expenses of $16,432. Of these expenses, $12,480 were paid in cash; $3,952 was still owed on account at year-end. In addition, Blossom prepaid $2,496 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