occurrea. Assume tne roowing transactions occurrea in January: Required: For eac
ID: 2340134 • Letter: O
Question
occurrea. Assume tne roowing transactions occurrea in January: Required: For each of the transactions, if an expense is to be recognized in January, indicate the amount. Activity Amount Dugg paid its computer service technicians $94,000 in salary for work done in a. January. Answer from Dugg's standpoint. h At the beginning of January, Turner Construction Company paid $6,600 in rent D. for February-April McGraw-Hill Education-publisher of this textbook-used $4,550 worth of electricity and natural gas in January, which it has not paid or recorded. Pooler Company received and paid in January a $3,000 invoice from a consulting firm for services received in January d. The campus bookstore received consulting services at a cost of $6,800. The terms indicate that payment is due within 30 days of the consultation. f Schergevitch Incorporated had tits delivery van repaired in January for $370 and charged the amount on account.Explanation / Answer
a) As the salary is paid to the technician for work done in January, the whole amount of salary expense should be recognized in the month of January (i.e. $94,000). The amount of salary expense in january will be $94,000.
b) Rent is paid for February to April in the beginning of January, therefore whole amount of rent is paid in advance. No expense will be recognized for the month of January because no expense is incurred for January.
c) The publisher should recognized whole amount of expense in January because the expense has been incurred (wheher paid in cash or not). Therefore the amount of expense will be $4,550.
d) As the service is received in January, the expense should be recognized in January (i.e for the amount of $3,000).
e) The expense is payable within 30 days but service has received and expense has incurred. As per accrual basis of accounting, an expense should be recognized when it is incurred. Therefore the whole amount of service charge should be recognized in the month of January (i.e. $6,800)
f) The amount of expense to be recognized is $370
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.