TASK 2FACTS:The following information for Miller Car Repairs is available for the month of June 2017:The income statement for the month showed salaries expense of $3,600 while the salaries paid to the employees during the month was $4,960 (the company does not “prepay”.The sales revenue for the month was $56,000 while the cash collected from customers were $59,200.The operating cash outflows paid during the period totaled $20,000, while total operating expenses on the income statement was $13,600.The income statement for the month showed interest revenue of $2,800 while the interest collected during the month was $3,360.Net income from operations for the month was higher than net cash flow from operating activities.Required:Indicate with the appropriate letter which of the following eight scenarios is consistent with each of the above observations:An increase in deferred expense. e) An increase in deferred revenueAn increase in accrued expense. f) An increase in accrued revenue.A decrease in deferred expense. g) A decrease in deferred revenue.A decrease in accrued expense. h) A decrease in accrued revenue.Hint: You need to list all possible changes that can explain each discrepancy. Organize your answer in a two column table. In the first column write the transaction number and in the second write the letter/letters representing your answer.
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