In its first year of operations, Sandhill Co, recognized $33,900 in service revenue, $6,200 of which was on account and still outstanding at year-end. The remaining $27,700 was received in cash from customers. The company incurred operating expenses of $16,600. Of these expenses, $12,940 were paid in cash; $3,660 was still owed on account at year-end. In addition, Sandhill prepaid $2,670 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 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? An analysis of the accounts shows the following. 1. The equipment depreciates $350 per month 2. Half of the unearned rent revenue was earned during the quarter. 3. Interest of $420 is accrued on the notes payable. 4 Supplies on hand total $840. 5. Insurance expires at the rate of $480 per month. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (If no entry is required, select "No Entry"for the account tities and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually) No. Date Account Titles and Explanation Debit Credit 1. Mar 31 2. MR. 31 Mar 11