Masters Consulting had the following selected transactions in August: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Show how each transaction would be handled using the cash basis and the accrual basis. Under each column, give the amount of revenue or expense for August using the cash basis and the accrual basis. (Enter "O" for any transactions that do not affect revenues or expenses. Use parentheses or a minus sign when entering expenses or losses. Round your answers to the nearest whale dollar) Amount of Revenue (Expense) for August Cash Basis Accrual Basis Revenue or (Expense) Revenue or (Expense) i More Info Date August August 1 4 5 8 11 19 24 26 29 31 31 Prepaid insurance for August through October, $1,500. Purchased office furniture for cash, $3,500. Perfarmed services and received cash $1.600. Paid advertising expense, $300. Performed service on account, $3,400. Purchased computer an account. $1.500. Collected for August 11 service. Paid account payable from August 19 Pald salary expense, $800. Adjusted for August insurance expense (see August 1). Eamed revenue of $400 that was collected in advance back in July. Recorded August depreciation expense on all fixed assets, S208. 31 Print Done Requirement 2. Compute August income foss) before tax under each accounting method. Income (loss) before tax Requirement 3. Indicate which measure of net income or net loss is preferable. Use the transactions on August 11 and August 24 to explain. The measure of net income is preferable because it accounts for revenues and expenses when they not when they For example, on August 11, the company 3,400 of revenue and increased its wealth as a result. The basis records this revenue, but the ignores it. On August 24, the business collected the receivable that was created by the revenue earned on account at August 11. The basis records no revenue on August 24 because the company's increase in wealth occurred back on August 11. The basis waits until cash is received, on August 24, to record the revenue. This is