o Smarts Consulting had the following selected transactions in May Click the loon to view the transactions Read the requirements Requirement 1. Show how each transaction would be handled using the cash basis and the ser basis Under each column, give the amount of revenue or expense for May using the cash basis and the accrual basis. (Enter for any transactions that do not afect revenues or expenses. Une parentheses or a minu when entering expenses or losses. Round your answers to the nearest whole dollar) Amount of Revenue pense) for May Cash Basis Aco Basis Revenue or Expense) Revenue or Expanse) Date May 1 4 5 11 19 Enter any number in the edities and then continue to the next question tions in May: 5 8 11 19 I 24 26 29 31 31 31 ax under each accounting method. Income (loss) ue to the next question. Smart Consulting had the following selected transactions in May Click the icon to view the transactions.) Read the requirements 31 31 Requirement 2. Compute May income (s) before tax under each counting method Income (s) before Requirement indicate which measure of net income or not loss is preferable. Use the actions on May 11 and May 24 to explain The mesture of net income is preferable because accounts for revenuts and expenses when they not when they For example, on May 11, the company $2.500 of revenue and increased its wealth as a result The basis records his revenue, but the basis ignores On May 24, the business collected the receivable that was created by the reverse camed on account at May 11. The basis records no revenue on May 24 because the company's increase in wealth occurred back on May 11. The basis waits unti cash is received, on May 24 to record the revenue. This is Enter any number in the edit fields and then continue to the next question More Info sh he May 1 Prepaid insurance for May through July, $2,400. 4 Purchased office furniture for cash, $4,500. 5 Performed services and received cash, $1,100. 8 Paid advertising expense, $300. 11 Performed service on account, $2,500. 19 Purchased computer on account, $2,500. 24 Collected for May 11 service. 26 Paid account payable from May 19. 29 Paid salary expense, $1,000. 31 Adjusted for May insurance expense (see May 1). 31 Earned revenue of $800 that was collected in advance back in April. 31 Recorded May depreciation expense on all fixed assets, $208. Print Done tio the using Requirements es or ex ) 1. Show how each transaction would be handled (in terms of recognizing revenues expenses) using the cash basis and the accrual basis. 2. Compute May income (loss) before tax under each accounting method. 3. Indicate which measure of net income or net loss is preferable. Use the transactions on May 11 and May 24 to explain. Print Done 11 19 question. Notes