Consider the following situations: 1. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots’ salaries associated with the flight are paid on September 2. 2. Eddie Bauer pays cash on January 6 to purchase sunglasses from a wholesale distributor. The sunglasses are sold to customers on January 27. 3. On January 1, Pizza Hut pays for a one-year property insurance policy with coverage starting immediately. 4. Sports Illustrated signs an agreement with CBS on January 12 to provide television advertisements during the Super Bowl. Payment is due within 3 weeks after February 4, the day of the Super Bowl. Sports Illustrated makes the payment on February 23. Required: For each situation, determine the date for which the company recognizes the expense under accrual-basis accounting.
Consider the following situations:
1. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots’ salaries associated with the flight are paid on September 2.
2. Eddie Bauer pays cash on January 6 to purchase sunglasses from a wholesale distributor. The sunglasses are sold to customers on January 27.
3. On January 1, Pizza Hut pays for a one-year property insurance policy with coverage starting immediately.
4. Sports Illustrated signs an agreement with CBS on January 12 to provide television advertisements during the Super Bowl. Payment is due within 3 weeks after February 4, the day of the Super Bowl. Sports Illustrated makes the payment on February 23.
Required:
For each situation, determine the date for which the company recognizes the expense under accrual-basis accounting.
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