Question: During 2010 Prairie Sales, Inc., earned revenues of $580,000 on account. Prairie collected $590,000 from customers during the year Expenses totaled $480,000, and the related

During 2010 Prairie Sales, Inc., earned revenues of $580,000 on account. Prairie collected $590,000 from customers during the year Expenses totaled $480,000, and the related cash payments were $460,000. Show what Prairie would report on its 2010 income statement under the

a). cash basis.

b). accrual basis.

Compute net income under both bases of accounting. Which basis measures net income better? Explain your answer.

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