Revenues are normally recognized when a company transfers promised goods or services to customers in the amount the company expects to be entitled to receive. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same time period. Assume that the following transactions occurred in January: a. McGraw-Hill Education uses $2,759 worth of electricity and natural gas in its headquarters building for which it has not yet been billed. b. At the beginning of January. Turner Construction Company pays $921 for magazine advertising to run in monthly publications each of the first three months of the yeat. c. Dell pays its computer service technicians $396,500 in salaries for the two weeks ended January 7. Answer from Dell's standpoint. d. Iowa State University orders 80,000 football tickets from its printer and prepays $7,760 in advance for the custom printing. The first game will be played in September. Answer from the university's standpoint. e. The campus bookstore recelves 600 accounting texts at a cost of $103 each. The terms indicate that payment is due within 30 days of dellvery. f. During the last week of January, the campus bookstore sold 580 accounting texts received in (e) at a sales price of $140 each, 9. Fucillo Automotive Group pays its salespersons $14,200 in commissions related to December automobile sales. Answer from Fucillo's standpoint. h. On January 31, Fucillo Automotive Group determines that it will pay its salespersons $53,600 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo's standpoint. L. A new grill is recelved and installed at a Wendy's restaurant at the end of the day on January 31: a $13,050cash payment is made on that day to the grill supply company. Answer from Wendy's standpoint. 1. Mall of America (in Bloomington, MN) had janitorial supplies costing $5,200 in storage. An additional $3,400 worth of supplies was purchased during January. At the end of January, $1,550 worth of janitorial supplies remained in storage. k. An Emory State University employee works eight hours, at $18 per hour, on January 31, however, payday is not until February 3. Answer from the university's point of view. 1. Wang Company paid $2,400 for a fire insurance policy on January 1 . The policy covers 12 months beginning on January 1. Answer from Wang's point of view. m. Derek incorporated has its delivery van repaired in January for $580 and charges the amount on account. n. Hass Company, a farm equipment company, receives its phone bill at the end of January for $242 for January calis. The bill has not been paid to date. 0. Martin Company receives and pays in January a $1,335 invoice (bili) from a consulting firm for services received in January. Answer from Martin's standpoint. p. Parillo's Taxi Company pays a $795 invoice from a consulting firm for services received and recorded in December. q. PVH Corporation, manufacturer of IZOD, ARROW, Van Heusen, Calvin Klein, and Tommy Hifiger apparel among other brands, completes production of 1,100 men's shirts ordered by Macy's department stores at a cost of $100 each and dellvers the order in January. Answer from PVH Corporation's standpoint. Required: For each of the transactions, if an expense is to be recognized in January, indicate the expense account title and the amount. Note: If expense is not recognized choose "None
