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:
Calculate the amount of expense recognized in May under
(a) The cash-basis of accounting
(b) The accrual-basis of accounting.