The following information describes transactions for Morgenstern Advertising Company during July: On July 5, Morgenstern purchased and received $24,300 of supplies on credit from Drexel Supply Inc. During July, Morgenstern paid $23,630 cash to Drexel and used $7,450 of the supplies. Morgenstern paid $13,780 to salespeople for salaries earned during July. An additional $1,510 was owed to salespeople at July 31 for salaries earned during the month. Morgenstern paid $2,950 to the local utility company for electric service. Electric service in July was $2,300 of the $2,950 total bill. Required: 1. Calculate the amount of expense recognized in July under cash-basis accounting. $ 2. Calculate the amount of expense recognized in July under accrual-basis accounting.
The following information describes transactions for Morgenstern Advertising Company during July: On July 5, Morgenstern purchased and received $24,300 of supplies on credit from Drexel Supply Inc. During July, Morgenstern paid $23,630 cash to Drexel and used $7,450 of the supplies. Morgenstern paid $13,780 to salespeople for salaries earned during July. An additional $1,510 was owed to salespeople at July 31 for salaries earned during the month. Morgenstern paid $2,950 to the local utility company for electric service. Electric service in July was $2,300 of the $2,950 total bill. Required: 1. Calculate the amount of expense recognized in July under cash-basis accounting. $ 2. Calculate the amount of expense recognized in July under accrual-basis accounting.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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i need help this this homework problem that has to do with cash-basis and accurural basis accounting
ornerstone Exercise 3-16 (
Expenses and the Matching Concept
The following information describes transactions for Morgenstern Advertising Company during July:
- On July 5, Morgenstern purchased and received $24,300 of supplies on credit from Drexel Supply Inc. During July, Morgenstern paid $23,630 cash to Drexel and used $7,450 of the supplies.
- Morgenstern paid $13,780 to salespeople for salaries earned during July. An additional $1,510 was owed to salespeople at July 31 for salaries earned during the month.
- Morgenstern paid $2,950 to the local utility company for electric service. Electric service in July was $2,300 of the $2,950 total bill.
Required:
1. Calculate the amount of expense recognized in July under cash-basis accounting.
$
2. Calculate the amount of expense recognized in July under accrual-basis accounting.
$
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