Please answer the blank questions at the very bottom of this prompt:

Exhibit 15 (Accrual Basis): Kelly Consulting Balance Sheet April 30, 20Y8 Assets Current assets: Cash Accounts receivable Supplies Prepaid rent Prepaid insurance Total current assets Property, plant, and equipment: Office equipment Accumulated depreciation Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable Salaries payable Unearned fees Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $22,1003,4001,35032001,500 $31,550 $14,500 (330) 14,170$45,720 $3,420 Stockholders' Equity \begin{tabular}{rr} $30,000 & \\ 12,300 & 42,300 \\ \hline$45,720 \\ \hline \hline \end{tabular} During April, Kelly Consulting entered into the following transactions: 1. Paid three months' rent on a lease rental contract, $4,800. 2. Paid the premiums on property and casualty insurance policies, $1,800. 4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000. 5. Purchased additional office equipment on account from Office Station Co., $2,000. 6. Received cash from clients on account, $1,800. 10. Paid cash for a newspaper advertisement, $120. 12. Paid Office Station Co. for part of the debt incurred on April 5, \$1,200. 12. Recorded services provided on account for the period April 1-12, $4,200. 14. Paid part-time receptionist for two weeks' salary, $750. 17. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250. 18. Paid cash for supplies, $800. 20. Recorded services provided on account for the period April 13-20, $2,100. 24. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850. 26. Received cash from clients on account, $5,600. 27. Paid part-time receptionist for two weeks' salary, $750. 29. Paid telephone bill for April, $130. 30. Paid electricity bill for April, $200. 30. Recorded cash from cash clients for fees earned for the period April 25-30, $3,050. 30. Recorded services provided on account for the remainder of April, $1,500. 30. Paid dividends, $6,000. In Exhibit 15 , Kelly Consulting reported accrual net income of $18,300. Under the cash basis of accounting, Kelly Consulting would have reported net income of $15,000. a. Why are the accrual- and cash-basis net incomes different? The accrual- and cash-basis net incomes are different because they recognize and differently. The accrual basis recognizes when they are earned, and are matched against the they generate. In contrast, the cash basis recognizes as cash is paid, regardless of when the are earned or the incurred. as cash is received and b. Select the examples of cash receipts recorded differently under the accrual and cash basis of accounting during April. recorded as office equipment. 4. On April 18, Kelly Consulting paid cash of $800 for supplies. Under the accrual basis, the payment was recorded as supplies, while under the cash basis, it would have been recorded as supplies expense. c. Select the examples of cash payments recorded differently under the accrual and cash basis of accounting during April. 1. On April 1, Kelly Consulting paid cash of $4,800 for three months rent. Under the accrual basis, the payment was recorded as prepaid rent, while under the cash basis, it would have been recorded as rent expense. 2. On April 2, Kelly Consulting paid cash of $1,800 for insurance. Under the accrual basis, the payment was recorded as prepaid insurance, while under the cash basis, it would have been recorded as insurance expense. d. From the April transactions of Kelly Consulting, select the examples of a cash payment that is recorded the same under the accrual and cash basis of accounting. 4. On April 18, Kelly Consulting paid cash of $800 for supplies. Under the accrual basis, the payment was recorded as supplies, while under the cash basis, it would have been recorded as supplies expense. e. Why is the accrual basis of accounting required by generally accepted accounting principles (GAAP)? The accrual basis of accounting is required by GAAP because it better reports the underlying with the they generate. In contrast, the cash basis records that they generated in the same period. of a company. It does this using the as cash is received and and as cash is paid, which often doesn't match recognition principles, which match the with the Exhibit 15 (Accrual Basis): Kelly Consulting Balance Sheet April 30, 20Y8 Assets Current assets: Cash Accounts receivable Supplies Prepaid rent Prepaid insurance Total current assets Property, plant, and equipment: Office equipment Accumulated depreciation Total property, plant, and equipment Total assets Liabilities Current liabilities: Accounts payable Salaries payable Unearned fees Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $22,1003,4001,35032001,500 $31,550 $14,500 (330) 14,170$45,720 $3,420 Stockholders' Equity \begin{tabular}{rr} $30,000 & \\ 12,300 & 42,300 \\ \hline$45,720 \\ \hline \hline \end{tabular} During April, Kelly Consulting entered into the following transactions: 1. Paid three months' rent on a lease rental contract, $4,800. 2. Paid the premiums on property and casualty insurance policies, $1,800. 4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000. 5. Purchased additional office equipment on account from Office Station Co., $2,000. 6. Received cash from clients on account, $1,800. 10. Paid cash for a newspaper advertisement, $120. 12. Paid Office Station Co. for part of the debt incurred on April 5, \$1,200. 12. Recorded services provided on account for the period April 1-12, $4,200. 14. Paid part-time receptionist for two weeks' salary, $750. 17. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250. 18. Paid cash for supplies, $800. 20. Recorded services provided on account for the period April 13-20, $2,100. 24. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850. 26. Received cash from clients on account, $5,600. 27. Paid part-time receptionist for two weeks' salary, $750. 29. Paid telephone bill for April, $130. 30. Paid electricity bill for April, $200. 30. Recorded cash from cash clients for fees earned for the period April 25-30, $3,050. 30. Recorded services provided on account for the remainder of April, $1,500. 30. Paid dividends, $6,000. In Exhibit 15 , Kelly Consulting reported accrual net income of $18,300. Under the cash basis of accounting, Kelly Consulting would have reported net income of $15,000. a. Why are the accrual- and cash-basis net incomes different? The accrual- and cash-basis net incomes are different because they recognize and differently. The accrual basis recognizes when they are earned, and are matched against the they generate. In contrast, the cash basis recognizes as cash is paid, regardless of when the are earned or the incurred. as cash is received and b. Select the examples of cash receipts recorded differently under the accrual and cash basis of accounting during April. recorded as office equipment. 4. On April 18, Kelly Consulting paid cash of $800 for supplies. Under the accrual basis, the payment was recorded as supplies, while under the cash basis, it would have been recorded as supplies expense. c. Select the examples of cash payments recorded differently under the accrual and cash basis of accounting during April. 1. On April 1, Kelly Consulting paid cash of $4,800 for three months rent. Under the accrual basis, the payment was recorded as prepaid rent, while under the cash basis, it would have been recorded as rent expense. 2. On April 2, Kelly Consulting paid cash of $1,800 for insurance. Under the accrual basis, the payment was recorded as prepaid insurance, while under the cash basis, it would have been recorded as insurance expense. d. From the April transactions of Kelly Consulting, select the examples of a cash payment that is recorded the same under the accrual and cash basis of accounting. 4. On April 18, Kelly Consulting paid cash of $800 for supplies. Under the accrual basis, the payment was recorded as supplies, while under the cash basis, it would have been recorded as supplies expense. e. Why is the accrual basis of accounting required by generally accepted accounting principles (GAAP)? The accrual basis of accounting is required by GAAP because it better reports the underlying with the they generate. In contrast, the cash basis records that they generated in the same period. of a company. It does this using the as cash is received and and as cash is paid, which often doesn't match recognition principles, which match the with the