A bill for $750 was received and recorded in the next month for legal fees performed in the current month. Create a new liability account as you did earlier in the chapter. Custom painting services recorded on invoice #1003 for $4,500 to Hagen’s toys were never performed even though invoiced. Thus, the revenue had not been earned. Create a new liability account as you did earlier in the chapter.

A bill for $750 was received and recorded in the next month for legal fees performed in the current month. Create a new liability account as you did earlier in the chapter. Custom painting services recorded on invoice #1003 for $4,500 to Hagen’s toys were never performed even though invoiced. Thus, the revenue had not been earned. Create a new liability account as you did earlier in the chapter.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter11: Work Sheet And Adjusting Entries

Section: Chapter Questions

Problem 3A

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One year ago, Allan Thorpe founded Alcazar Sales Company, and the business has prospered. Allan comes to you for advice. He wishes to know how much net income the business earned during the past year. The accounting records consist of the T-accounts in the ledger, which were prepared by an accountant who has resigned from the company. The accounts at December 31, ( please see the pic) Allan indicates that, at year-end, customers owe him $1,000 accrued service revenue, which he expects to collect early next year. These revenues have not been recorded. During the year, he collected $4,100 service revenue in advance from customers, but the business has earned only $800 of that amount. During the year he has incurred $2,400 of advertising expense, but he has not yet paid for it. In addition, he has used up $2,100 of the supplies. Allan determines that depreciation on equipment was $7,000 for the year. At December 31, he owes his employee $1,200 accrued salary. The rent paid in advance on…