Use Hormel Foods’ balance sheet in Exhibit to answer these questions:
1. The current asset section shows prepaid expenses. What might these pertain to? Have the “expenses” referred to here been recognized (i.e., included on the period’s income statement)?
2. The liabilities section shows accrued expenses. What does this represent? Have the associated expenses been recognized?
3. The liabilities section shows accounts payable. Explain what this is and what Hormel Foods will do to satisfy this liability.