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In its first year of operations, Sunland Company recognized $33,800 in service revenue, $6,700 of...

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Accounting

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In its first year of operations, Sunland Company recognized $33,800 in service revenue, $6,700 of which was on account and still outstanding at year-end, The remaining $27,100 was received in cash from customers. The company incurred operating expenses of $19,600. Of these expenses, $12,640 were paid in cash; $6,960 was still owed on account at year-end. In addition, Sunland prepaid $3,250 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

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