me cash i More Info ing the hues or expenses. Use July 1 4 5 8 11 19 24 26 29 31 31 Prepaid insurance for July through September, $3,000. Purchased office furniture for cash, $3,500. Performed services and received cash, $1,500. Paid advertising expense, $600. Performed service on account, $3,100. Purchased computer on account, $1,600. Collected for July 11 service. Paid account payable from July 19. Paid salary expense, $1,500. Adjusted for July insurance expense (see July 1). Earned revenue of $900 that was collected in advance back in June. Recorded July depreciation expense on all fixed assets, $260. 31 Print Done 31 Mings Consulting had the following selected transactions in July 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 July using the cash basis and the accrual basis. (Enter "O" for any transactions that do not affect venues or expen losses. Round your answers to the nearest whole dollar.) Amount of Revenue (Expense) for July Cash Basis Accrual Basis Revenue or (Expense) Revenue or (Expense) Date July 4 5 8 11 19 24 26 29 31 31 31 Enter any number in the edit fields and then continue to the next question. 31 Requirement 2. Compute July income (loss) before tax under each accounting method. Income (ons) before tax Requirement 3. Indicato which measure of not income or not lone is preferable. Use the transactions on July 11 and July 24 to explain The measure of net income is preferable because it accounts for revenues and expenses when they not when they Ford company 3,100 of revenue and increased its wealth as a result. The basis records this revenue, but the basis ignores accrual basis cash-basis llected the receivable that was created by the revenue earned on account at July 11. The basis records no revenue on July 24 because the company's increase basis waits until cash is received, on July 24, to record the revenue. This is On J Enter any number in the edit fields and then continue to the next question. 31 3000 31 900 31 290 Requirement 2. Compute July income (1) before tax under each accounting method. Income (0) before tax Requirement 3. Indicate which measure of net income or not loss is preferable. Use the transactions on July 11 and July 24 to explain The accrual-bani menure of net income is preferable because it accounts for revenues and expenses when they cou not when they are received or paid in cash For example, on July 11, the company collected $3,100 of revenue and increased its wealth as a result. The cow basis records this revenue, but the cash basis ignores On July 24, the business collected the receivable that was created by the revenue eamed on account at July 11. The crual basis records no revenue on July 24 because the company's increase in basis waits until cash is received, on July 24, to record the revenue. This is too late cash Enter any number in the edit fields and then continue to the next question ing method Income (loss) before tax able. Use the transactions on July 11 and July 24 to explain. ats for revenues and expenses when they occur not when they are received or paid in cash mcreased its wealth as a result. The accrui are reived or paid in cash cash basis ignores it occur n July 24 because the company's increase in revenue earned on account at July 11. The hue. This is too late stion. MacBook Air 31 900 31 260 under each accounting method. Income (loss) before tax or net loss is preferable. Use the transactions on July 11 and July 24 to explain. ble because it accounts for revenues and expenses when they occur not when they are myceived or paid in cash 3,100 of revenue and increased its wealth as a result. The accrual basis records this revenue, but the cash are received or paid in cash vealth occur at was created by the revenue earned on account at July 11. The accrual basis records no revenue on July 24 24. to record the revenue. This is too late ntinue to the next question. MacBook Air FB F7 F6 13 20 1500 31 3000 31 000 31 200 Requirement 2. Compute July income (los) before tax under each accounting method Income (s) before tax Requirement 3. Indicate which measure of net income or not loss is preferable. Use the transactions on July 11 and July 24 to explain The accrual-banin measure of net income is preferable because it accounts for revenues and expenses when they cour not when they are received or paid in cash For example, on July 11, the company collected $3,100 of revenue and increased its wealth as a result. The accrual basis records this revenue, but the cash basis grores it On July 24, the business collected the receivable that was created by the revenue sumed on account at July 11. The Bow basis records no revenue on July 24 because the company's increase in wealth occured back on cash basis wait until cash is received on July 24, to record the revenue. This is too we next