During the year ended December 31, 2011, Rainmaker Entertainment Inc. (Rainmaker) experienced numerous accruals and deferrals. As a long-term employee of Rainmaker's accounting and financial staff, it is your job to explain the effects of accruals and deferrals on Rainmaker's 2011 financial statements. (Rainmaker's 2011 financial statements appear on My Accounting Lab.) Suppose the following questions were raised at the shareholders' meeting:
1. "Prepaid expenses and deposits" in the amount of $523,760 are listed on the December 31, 2011, balance sheet. What items would be included in this balance, and why is this account listed as a balance sheet account instead of an expense account?
2. "Accounts payable and accrued liabilities" are shown on the balance sheet in the amount of $1,308,881. Define an accrued liability.
3. What is "depreciation and amortization," and how much would have been recorded for the year ended December 31, 2011?