Exercise 3-1A Determine the timing of revenue recognition (LO3-1) Consider the following situations: Required: For each situation, determine the date for which the company recognizes the revenue under accrual-basis accounting. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs 1. on August 16. 2. A customer purchases sunglasses from Eddie Bauer on January 27 on account. Eddie Bauer receives payment from the customer on February 2. On March 30, a customer preorders 10 supreme pizzas (without onions) from Pizza Hut for a 3. birthday party. The pizzas are prepared and delivered on April 2. The company receives cash at the time of delivery A customer pays in advance for a three-month subscription to Sports Illustrated on July 1. Issues are scheduled for delivery each week from July 1 through September 30. Consider the following situations: Required: For each situation, determine the date for which the company recognizes the expense under accrual-basis accounting. 1. 2. American Airlines operates a flight from Dallas to Los Angeles on August 16. The pilots' salaries associated with the flight are paid on September 2. Eddie Bauer pays cash on January 6 to purchase sunglasses from a wholesale distributor. The sunglasses are sold to customers on January 27. 3. On January 1, Pizza Hut pays for a one-year property insurance policy with coverage starting immediately Sports Illustrated signs an agreement with CBS on January 12 to provide television advertisements 4. during the Super Bowl. Payment is due within 3 weeks after February 4, the day of the Super Bowl. Sports Illustrated makes the payment on February 23