P3-4B. Effects of adjusting journal entries on statement of earnings accounts (Learning Objectives 2 & 3) 20-25 min. Fischer Remodelling Inc. completed the following selected transactions and prepared these adjusting entries during August: Prepaid insurance for August through October, $3,000. Performed service on account, $3,150. Aug 1 3 6 Purchased office furniture on account, $1,400. 8 Paid property tax expense, $975. 12 Purchased office equipment for cash, $1,950. 18 Performed services and received cash, $2,800. 23 26 30 31 31 Collected $925 on account. Paid the account payable from the August 6 transaction. Paid salaries expense, $1,350. Recorded an adjusting entry for August insurance expense related to the August 1 transaction. Recorded an adjusting entry for unearned revenue now earned, $650. Requirements 1. State whether each transaction would increase revenues, decrease reve- nues, increase expenses, decrease expenses, or have no effect on reve- nues or expenses. If revenues or expenses are affected, give the amount of the impact on revenues or expenses for August. Use the following for- mat for your answer. Revenues and Expenses for August Date Aug XX Impact on Revenues or Expenses Increase Revenues $ Effect on Revenues or Expenses $XXX 2. Compute August net earnings or net loss under the accrual basis of accounting. 3. State why accrual accounting results in an accurate measurement of earnings.