Question 3 1. Prepare the required closing entries for the following selected accounts from the records of Shipit Transportation Inc. at December 31, 2016. Cost of services sold Accumulated depreciation Selling, general, and administrative expense Retained earnings, December 31, 2015 Service revenue Depreciation expense Other revenue Income tax expense Dividends Income tax payable $11,600 17,800 6,900 1,900 23,600 4,100 600 400 400 300 INTRODUCTION TO FINANCIAL ACCOUNTING Retained Earnings. Question 4 Academic Consultants Inc. had the following selected transactions in August 2016: Aug 1 4 5 8 11 19 24 26 29 31 31 Prepaid insurance for August through December, $1,000 Purchased software for cash, $800 Performed service and received cash, $900 Paid advertising expense, $300 Performed service on account, $3,000 Purchased computer on account, $1,600 Collected for the August 11 service Paid account payable from August 19 Paid salary expense, $900 Adjusted for August insurance expense (see Aug 1) Earned revenue of $800 that was collected in advance in July 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 August. Journal entries a required. Use the following format for your answer and show your computations. ademic Consultants Inc. Amount of Revenue (Expense) for August 2016 Date Cash Basis Aug 1 Revenue/(Expense) Amount Accrual Basis Revenue/(Expense) Amount 2. Compute August income (loss) before tax under each accounting method. 3. Explain which measure of net income or net loss is preferable