Expense recognition. Kroger Stores uses the accrual basis of accounting and recognizes revenue at the time its
Question:
Expense recognition. Kroger Stores uses the accrual basis of accounting and recognizes revenue at the time its sells goods or renders services. Indicate the amount of expense recognized during October (if any) from each of the following transactions or events:
a. Pays \(\$ 4,670\) on October 5 for advertisements that appeared in local newspapers during September.
b. Pays \(\$ 12,000\) on October 6 for refrigerators delivered to its stores on September 30. The firm expects the refrigerators to last for five years and have no salvage value.
c. Pays \(\$ 24,000\) on October 10 for property taxes for the period October 1 of this year to September 30 of next year.
d. Pays \(\$ 12,900\) on October 15 for cleaning supplies purchased on October 10 . Cleaning supplies on hand on October 1 cost \(\$ 2,900\) and on October 31 cost \(\$ 3,500\).
e. Pays \(\$ 1,200\) on October 20 for repairs done to a forklift truck on October 1. The truck had a remaining useful life of five years on October 1.
f. Pays \(\$ 10,000\) on October 25 as a deposit on land Kroger plans to purchase for a new store.
g. Pays \(\$ 20,000\) on October 31 as rent on a warehouse for October and November.
Step by Step Answer:
Financial Accounting An Introduction To Concepts Methods And Uses
ISBN: 9780324183511
10th Edition
Authors: Clyde P. Stickney, Roman L. Weil