ent I CALCuLATOR | PRINTER VERSON BACK Exercise 4-5 In its first year of operations, Carla Vista Co. recognized $33,800 in service revenue, $7,400 of which was on account and still outstanding at year-end. The remaining $26,400 was received in cash from customers The company incurred operating expenses of $19,300 Of these expenses, 12,800 were paid in cash; $6,500 was still owed on account at year-end. In addition, Carla Vista prepaid $3,210 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. Cash Basis Accrual Basis Net Income (b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers? Click if you would like to Show Work for this question: Qpen Show Work Question Attempts: 0 of 3 used SAVE FOR LATER SUBHET ANSWER Policy l 2000-2018)on withsonsins. Al Rights Reserved. A Division of Johnylex. asens, Version 4.24.9.3