YummyView the transactions.Read the requirements.Catering completed the following selected transactions during May:Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also indicate the dollar amount ofthe revenue or expense. The May 1 transaction has been completed as an example. (Abbreviation used: Depr=Depreciation. Enter "0" for any transactions that do not affect revenues or expenses.)DateMay 1May 5Amount of Revenue (Expense) for MayCash Basis Amountof Revenue (Expense)$(1,200)Accrual Basis Amountof Revenue (Expense)0TransactionsMay 1May 5May 9May 14May 23May 31May 31May 31Prepaid rent for three months, $1,200.Received and paid electricity bill, $600.Received cash for meals served to customers, $2,100.Paid cash for kitchen equipment, $1,800.Served a banquet on account, $3,000.Made the adjusting entry for rent (from May 1).Accrued salary expense, $2,000.Recorded depreciation for May on kitchen equipment, $30.XRequirements1. Show whether each transaction would be handled as a revenue or anexpense using both the cash basis and accrual basis accounting systems bycompleting the table provided. (Expenses should be shown in parentheses.)Also, indicate the dollar amount of the revenue or expense. The May 1transaction has been completed as an example.Amount of Revenue (Expense) for MayCash Basis Amount ofRevenue (Expense)2.Accrual Basis Amount ofRevenue (Expense)$(1,200)$0DateMay 1After completing the table, calculate the amount of net income or net loss forYummy Catering under the accrual basis and cash basis accounting systemsfor May.3. Considering your results from Requirement 2, which method gives the bestpicture of the true earnings of Yummy Catering? Why?

Explanation:Under Cash basis of accounting transaction is recorded as soon as cash is received and…

1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Date May 1 $ (1,200) 2. After completing the table, calculate the amount of net income or net loss for Yummy Catering under the accrual basis and cash basis accounting systems for May. 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Yummy Catering? Why?

1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Date May 1 $ (1,200) 2. After completing the table, calculate the amount of net income or net loss for Yummy Catering under the accrual basis and cash basis accounting systems for May. 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Yummy Catering? Why?

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter3: Setting Up A New Company

Section: Chapter Questions

Problem 4.9C

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