May 1 Prepaid rent for three months, $3,000. 5 Received and paid electricity bill, $800. 9 Received cash for meals served to customers, $2,400. 14 Paid cash for kitchen equipment, $3,120. 23 Served a banquet on account, $3,800. 31 Made the adjusting entry for rent (from May 1). 31 Accrued salary expense, $1,100. 31 Recorded depreciation for May on kitchen equipment, $52. 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. 2. After completing the table, calculate the amount of net income or net loss for Yummy Catering under the accrual basis and cash basis accounting systems for May. 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Yummy Catering? Why? Yummy Catering completed the following selected transactions during May 2018: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. (Enter "O" for any transactions that do not affect revenues or expenses.) Amount of Revenue (Expense) for May Cash Basis Amount Accrual Basis Amount Date se) of Revenue (Expense) of Revenue (Expense) $ (3,000) May 1 May 5 May 9 May 14 May 23 May 31 May 31 rent salary May 31 depr Requirement 2. After completing the table, calculate the amount of net income or net loss for Yummy Catering under the accrual basis and cash basis accounting systems for May. (Use parentheses or a minus sign to indicate a loss.) Cash Basis Amount Accrual Basis Amount Net inco Net income (loss) D D Requirement 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Yummy Catering? Why? The V gives the best picture of the true earnings of Yummy Catering because revenues are recorded when and expenses are recorded when V, as dictated by the revenue recognition principle and the matching principle. earned Enter any number in the edit fields and then continue to the next question. paid