Prairies Consultants Inc. Amount of Revenue (Expense) for May 2017 Date Cash Basis Accrual Basis May 1 4 8 11 19 24 26 29 31 31
Prairies Consultants Inc. Amount of Revenue (Expense) for May 2017 Date Cash Basis Accrual Basis May 1 4 8 11 19 24 26 29 31 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Show how each transaction would be handled using the cash basis and the accrual basis. Assume depreciation expense of $30 for software and $30 for the computer.

Transcribed Image Text:Under each column, give the amount of revenue or expense for May using the cash basis and the accrual basis. (Enter "0" for any transactions that do not affect revenues or expenses. Use parentheses or a minus sign when entering
expenses or losses.)
Prairies Consultants Inc.
Amount of Revenue (Expense) for May 2017
Date
Cash Basis
Accrual Basis
May
1
4
8
11
19
24
26
29
31
31

Transcribed Image Text:May 1 Prepaid insurance for May through September, $1,000
4 Purchased software for cash, $700
5 Performed service and received cash, $500
8 Paid advertising expense, $500
11 Performed service on account, $3,200
19 Purchased computer on account, $2,300
24 Collected for the May 11 service
26 Paid account payable from May 19
29 Paid salary expense, $800
31 Adjusted for May insurance expense (see May 1)
31 Earned revenue of $600 that was collected in advance in April
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