Prairies Consultants Inc had the following selected

transactions in August #6595

Prairies Consultants Inc had the following selected transactions in August

Prairies Consultants Inc. had the following selected transactions in August 2017:

Aug. 1 Prepaid insurance for August through December, $1,000

4 Purchased software for cash, $800

5 Performed service and received cash, $900

8 Paid advertising expense, $300

11 Performed service on account, $3,000

19 Purchased computer on account, $1,600

24 Collected for the August 11 service

26 Paid account payable from August 19

29 Paid salary expense, $900

31 Adjusted for August insurance expense (see Aug. 1)

31 Earned revenue of $800 that was collected in advance in July

Requirements

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 are not
required. Use the following format for your answer, and show your computations. Assume
depreciation expense of $30 for software and $30 for the computer.

Prairies Consultants Inc.

Amount of Revenue (Expense) for August 2017

Date ................................................. Cash Basis............... Accrual Basis

2. Compute August income (loss) before tax under each accounting method.

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 3. Indicate which measure of net income or net loss is preferable. Use the transactions on
August 11 and 24 to explain.

Prairies Consultants Inc had the following selected transactions in August

ANSWER
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transactions-in-august/

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