In its first year of operations, Sheridan Company recognized $22,960 in service revenue, $4,920 of which was on account and still outstanding at year-end. The remaining $18,040 was received in cash from customers. The company incurred operating expenses of $12,956. Of these expenses, $9,840 were paid in cash; $3,116 was still owed on account at year-end. In addition, Sheridan prepaid $1,968 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?