The following information describes transactions for Morgenstern Advertising Company during July: On July 5, Morgenstern...
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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 $21,860 cash to Drexel and used $9,910 of the supplies. Morgenstern paid $15,260 to salespeople for salaries earned during July. An additional $3,410 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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