Refer to the situations discussed in E3–1.
Required:
For each situation, determine the date for which the company recognizes revenue using cash-basis accounting.
E3–1 Consider the following situations:
1. American Airlines collects cash on June 12 from the sale of a ticket to a customer. The flight occurs 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.
3. On March 30, a customer preorders 10 supreme pizzas (without onions) from Pizza Hut for a birthday party. The pizzas are prepared and delivered on April 2. The company receives cash at the time of delivery.
4. 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.
Required:
For each situation, determine the date for which the company recognizes the revenue under accrual-basis accounting.
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Financial Accounting
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- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning