Cornerstone Exercise 3-15 (Algorithmic) Expense Recognition (or Matching) Principle 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. During July, Morgenstern paid $20,100 cash to Drexel and used $18,250 of the supplies. b. Morgenstern paid $10,300 to salespeople for salaries earned during July. An additional $1,610 was owed to salespeople at July 31 for salaries earned during the month. c. Paid $2,950 to the local utility company for electric service. Electric service in July was $2,300 of the $2,950 total bill. Required: 1. Calculate the amount of expense recognized in July under cash-basis accounting. 2. Calculate the amount of expense recognized in July under accrual-basis accounting