Under accrual basis accounting, expenses are recognized when incurred, which means the activity giving rise to the expense has occurred. Assume the following transactions occurred in January:
a. Dell paid its computer service technicians $ 90,000 in salary for work done in January. Answer from Dell’s standpoint.
b. At the beginning of January, Turner Construction Company paid $ 3,000 in rent for February– April.
c. McGraw- Hill Education — publisher of this textbook— used $ 3,000 worth of electricity and natural gas in January for which it has not yet been billed.
d. Pooler Company received and paid in January a $ 1,500 invoice from a consulting firm for services received in January.
e. The campus bookstore received consulting services at a cost of $ 5,000. The terms indicate that payment is due within 30 days of the consultation.
f. Schergevitch Incorporated had its delivery van repaired in January for $ 280 and charged the amount on account.
Required:
For each of the transactions, if an expense is to be recognized in January, indicate the amount. If an expense is not to be recognized in January, indicate why.