Professors Consulting had the following selected transactions in July:

More Info -X Prepaid insurance for July through September, $750. Purchased office furniture for cash, $6,500. Performed services and received cash, $1,000. Paid advertising expense, $500. Performed service on account, $2,800. Purchased computer on account, $2,300. 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 $1,000 that was collected in advance back in June Recorded July depreciation expense on all fixed assets, $360. July 1 4 5 8 11 19 24 26 29 31 31 31 Print Done Requirements 1. Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis. 2. Compute July income (loss) before tax under each accounting methoo. 3. Indicate which measure of net income or net loss is preferable. Use the transactions on July 11 and July 24 to explain. PrintDone Professors Consulting had the following selected transactions in July: (Glick the ioon to view the transactions.) Read the teauirements 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 revenues or expenses. Use parentheses or a minus sign when entering expenses or losses. Round your answers to the nearest whole dollar.) Amount of Revnue (Expense) for July Cash Basis Accrual Basis Date Revenue or (Expense) Revenue or (Expense) July 19 24 26 29 31 31 31 Requirement 2. Compute July inicome (loss) before tax under each accounting method Income (loss) before tax Requirement 3. Indicate which measure of net income or net loss 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 Vnot when they For example, on July 11, the company $2,800 of revenue and increased its wealth as a r. hebasis records this revenue, but thebasis ignores it On July 24, the business co ected the receivable that was created by the revenue ea ed on account atJur T e basis record no revenu e on because the ompany s increase inwealth curred a on e basis waits until cash is received, on July 24, to record the revenue. This is