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In its first year of operations, Crane Company recognized $$30,240$ in service revenue, $$6,480$ of which was on account and still outstanding at year$-$end. The remaining $$23,760$ was received in cash from customers.

The company incurred operating expenses of $$17,064.$ Of these expenses, $$12,960$ were paid in cash; $$4,104$ was still owed on account at year$-$end. In addition, Crane prepaid $$2,592$ for insurance coverage that would not be used until the second year of operations.

$($a$)$ Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the accrual basis of accounting.

$\backslash$table$[[,$Cash Basis,Accrual Basis$],[$Net Income $$,$$$,]]$

$($b$)$ Which basis of accounting $($cash or accrual$)$ provides more useful information for decision$-$makers?

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$3/27/2024$

$($a$)$ Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the accrual basis of accounting.

$\backslash$table$[[,$Cash Basis,Accrual Basis$],[$Net Income $$,,]]$

$($b$)$ Which basis of accounting $($cash or accrual$)$ provides more useful information for decision$-$makers?

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