Assume that we use a perpetual inventory system and that five identical units are purchased separately at the following four dates and costs: april 5 at $10, april 10 at $12, april 15 at $14, and april 20 at $16 april 20 $17. one unit is then sold on april 25. the company uses the first-in, first-out (fifo) inventory costing method. identify whether each of the items purchased will be sent to cost of goods sold on the income statement or reported in inventory on the balance sheet using the drop-down list.

In its first year of operations, sunland company recognized $30,000 in service revenue, $8,100 of which was on account and still outstanding at year-end. the remaining $21,900 was received in cash from customers. the company incurred operating expenses of $18,600. of these expenses, $12,880 were paid in cash; $5,720 was still owed on account at year-end. in addition, sunland prepaid $3,270 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 the first year's net earnings under the accrual basis of accounting.