College
Journalizing Purchases Transactions Journalize the following transactions in a general journal: May 3 Purchased merchandise from Reed, $6,780. Invoice No. 321, dated May 1, terms n/30. 9 Purchased merchandise from Omana, $2,550. Invoice No. 614, dated May 8, terms 2/10, n/30. 18 Purchased merchandise from Yao Distributors, $2,100. Invoice No. 180, dated May 15, terms 1/15, n/30. 23 Purchased merchandise from Brown, $5,240. Invoice No. 913, dated May 22, terms 1/10, n/30.
In its first year of operations, Crane Company recognized $31,700 in service revenue, $7,700 of which was on account and still outstanding at year-end. The remaining $24,000 was received in cash from customers. The company incurred operating expenses of $16,600. Of these expenses, $12,690 were paid in cash; $3,910 was still owed on account at year-end. In addition, Crane prepaid $3,260 for insurance coverage that would not be used until the second year of operations.Required:Calcuate the first year's net earnings under the cash basis of accounting, and calculate the first years net earnings under the accrual basis of accouriting.