Identify the correct sequence of events leading up to credit problems that affected the economy:

Consumers became unable to pay back loans.

the economy grew.

banks loosened their criteria for approving loans and credit.

spending halted, and the economy experienced a recession.

consumers spent more.

businesses were left without payment on purchases they’d financed.

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.