In its first year of operations, Pharoah Company recognized $32,480 in service revenue, $6,960 of which was on account and still outstanding at year-end. The remaining $25,520 was received in cash from customers. The company incurred operating expenses of $18,328. Of these expenses, $13,920 were paid in cash; $4,408 was still owed on account at year-end. In addition, Pharoah prepaid $2,784 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?