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AP Ouellette & Associates began operations on January 1, 2021. Its fiscal year end is December 31 and it prepares financial statements and adjusts its accounts annually. Selected transactions for 2021 follow: 1. On January 10, bought office supplies for $3,290 cash. A physical count at December 31, 2021, revealed $950 of supplies still on hand. 2. Paid cash for a $3,696, one-year insurance policy on February 1. The policy came into effect on this date. 3. On March 31, purchased equipment for $24,000 cash. The equipment has an estimated eight-year useful life. 4. Rented office space on September 1 for a one-year period for $540 per month. Paid annual rent of $6,480 in cash. 5. On October 15, received a $1,749 advance cash payment from a client for accounting services expected to be provided in the future. As at December 31, one third of these services had not been performed. 6. On November 1, rented out unneeded office space for a six-month period starting on this date, Problems: Set A ENG

Taking it Further Which method do you recommend that Southlake use? Why? P3.2A (LO 2) AP Ouellette \& Associates began operations on January 1, 2021. Its fiscal year end is December 31 and it prepares financial statements and adjusts its accounts annually. Selected transactions for 2021 followi 1. On Junuary 10, bought office supplies for $3,290 cash. A physical count at December 31,2021 , reveated $950 of supplies still on hand. 2. Paid cash for a $3,696, one-year insurance policy on February 1. The policy came into effect on this date. 3. On March 31, purchased equipment for $24,000 cash. The equipment has an estimated eight-year useful life. Problems: Set A 4. Rented office space on September 1 for a one-year period for $540 per month. Paid annual rent of $6,480 in cash. 5. On October 15 , received a $1,749 advance cash payment from a client for accounting services expected to be provided in the future. As at December 31, one third of these services had not been performed

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