Accrual-and Cash-Basis Expenses}

Speedy Delivery Company provides next-day delivery across Eastern Canada. 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.

\section*{Required:}

Calculate the amount of expense recognized in May under

(a) the cash basis of accounting and

(b) the accrual basis of accounting.

\section*{Cornerstone Exercise