Hi I need Accounting help please. Accrual- and Cash-Basis Expenses Speedy Delive
ID: 2419309 • Letter: H
Question
Hi I need Accounting help please.
Accrual- and Cash-Basis Expenses
Speedy Delivery Company provides next-day delivery across the southeastern United States. During May, Speedy incurred $132,600 in fuel costs. Speedy paid $95,450 of the fuel cost in May, with the remainder paid in June. In addition, Speedy paid $15,000 in May to another fuel supplier in an effort to build up its supply of fuel.
Required:
1. Calculate the amount of expense recognized in May under cash-basis accounting.
$
2. Calculate the amount of expense recognized in May under accrual-basis accounting.
$
Identification of Adjusting Entries
Singleton Inc. uses the accrual basis of accounting and had the following transactions during the year.
Required:
Identify and explain why each transaction may or may not require adjustment.
a. Merchandise was sold to customers on credit.
will not require an adjustment/ may require an adjustment (which one is it)
b. Purchased equipment to be used in the operation of its business.
will not require an adjustment/ may require an adjustment (which one is it)
c. A 2-year insurance contract was purchased.
will not require an adjustment/ may require an adjustment (which one is it)
d. Received cash for services to be performed over the next year.
will not require an adjustment/ may require an adjustment (which one is it)
e. Paid weekly employee salaries
will not require an adjustment/ may require an adjustment (which one is it)
f. Borrowed money from First Bank by signing a note payable due in 5 years.
will not require an adjustment/ may require an adjustment (which one is it)
Thanks
Explanation / Answer
Solution:
1.
2.
Amount of Expense under cash baisis accounting Amount paid by Speedy 95,450 Add: Paid to another supplier 15,000 Cash paid 110,450 Amount of Expense under cash baisis accounting 110,450