Answer:
Explanation:
The following information describes transactions for Morgenstern Advertising Company during July: a. On July 5, Morgenstern purchased and received $24,300 of supplies on credit from Drexel Supply Inc. ACCRUAL
During July, Morgenstern paid $20,500 cash to Drexel and used $18,450 of the supplies. CASH
b. Morgenstern paid $9,600 to salespeople for salaries earned during July. CASH/ACCRUAL
An additional $1,610 was owed to salespeople at July 31 for salaries earned during the month. ACCRUAL
c. Paid $2,950 to the local utility company for electric service. CASH
Electric service in July was $2,300 of the $2,950 total bill. ACCRUAL
CASH BASIS
1. During July, Morgenstern paid $20,500 cash to Drexel for supplies
2. Morgenstern paid $9,600 to salespeople for salaries
3. Paid $2,950 to the local utility company for electric service
Expenses
Supplies .........20,500
Salaries.............9,600
Electric Bill........<u>2,950</u>
Total <u>33,050</u>
<u />
ACCRUAL BASIS
1. On July 5, Morgenstern purchased and received $24,300 of supplies on credit from Drexel Supply Inc
2. b. Morgenstern paid $9,600 to salespeople for salaries earned during July. CASH/ACCRUAL
3. An additional $1,610 was owed to salespeople at July 31 for salaries earned during the month. ACCRUAL
4. Electric service in July was $2,300 of the $2,950 total bill. ACCRUAL
Expenses
Supplies ..........................24,300
Salaries....(9,600+1,610) 11,210
Electric Bill........................<u>2,300</u>
Total <u>37,810</u>
<u />
