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Calculate the advertising expense

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A business commenced an agreement in February 2011 to pay advertising of $1 320 (including GST) eachmonth. The payment is made on the 20th day of each month for the following month.On 1 September 2011 the agreement was renegotiated with a 20% increase in advertising effective from1 October 2011, commencing with the payment on 20 September.a. Calculate the cash paid for advertising for the year ended 30 June 2012.2 marksb. Calculate the Advertising Expense for the year ended 30 June 2012.2 marksc. With reference to one accounting principle, explain why the Advertising Expense for the year is not thesame as the amount paid for advertising.

Reference no: EM131173242

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