Movie Madness sells subscriptions for $144 for 36 months. The company collects cash in advance and then subscribers have access to unlimited movies each month. Apply the revenue recognition principle to determine a. when Movie Madness should record revenue for this situation. b. the amount of revenue Movie Madness should record for two months. a. Movie Madness should record revenue when v the customer. b. For two months, Movie Madness should record revenue of
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- Review the following transactions and prepare any necessary journal entries. A. On January 5, Bunnet Co. purchases 350 aprons (Supplies) at $25 per apron from a supplier, on credit. Terms of the purchase are 3/10, n/30 from the invoice date of January 5. B. On February 18, Melon Construction receives advance cash payment from a client for construction services in the amount of $20,000. Melon had yet to provide construction services as of February 18. C. On March 21, Noonan Smoothies sells 875 smoothies for $4 cash per smoothie. The sales tax rate is 6.5%. D. On June 7, Organic Methods paid a portion of their noncurrent note in the amount of $9,340 cash.Review the following transactions, and prepare any necessary journal entries. A. On July 16, Arrow Corp. purchases 200 computers (Equipment) at $500 per computer from a supplier, on credit. Terms of the purchase are 4/10, n/50 from the invoice date of July 16. B. On August 10, Hondo Inc. receives advance cash payment from a client for legal services in the amount of $9,000. Hondo had yet to provide legal services as of August 10. C. On September 22, Jack Pies sells thirty pies for $25 cash per pie. The sales tax rate is 8%. D. On November 8, More Supplies paid a portion of their noncurrent note in the amount of $3,250 cash.Review the following transactions and prepare any necessary journal entries for Woodworking Magazine. Woodworking Magazine provides one issue per month to subscribers for a service fee of $240 per year. Assume January 1 is the first day of operations for this company, and no new customers join during the year. A. On January 1, Woodworking Magazine receives advance cash payment from forty customers for magazine subscription services. Handyman had yet to provide subscription services as of January 1. B. On April 30, Woodworking recognizes subscription revenues earned. C. On October 31, Woodworking recognizes subscription revenues earned. D. On December 31, Woodworking recognizes subscription revenues earned.
- Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.On January 1, a flower shop contracts with customers to provide flowers for their wedding on June 2. The total contract price is $3,000, payable in equal installments for the next six months on the first of each month (with the first payment due January 1). How much will be recorded as revenue during the month of April?
- According to your studying of the Conceptual Framework, Discuss the following: 1. Selane Eatery operates a catering service specializing in business luncheons for large companies. Selane requires customers to place their orders 2 weeks in advance of the scheduled events. Selane bills its customers on the tenth day of the month following the date of service and requires that payment be made within 30 days of the billing date. Conceptually, when should Selane recognize revenue related to its catering service? 2. Mogilny Company paid $135,000 for a machine. The Accumulated Depreciation account has a balance of $46,500 at the present time. The company could sell the machine today for $150,000. The company president believes that the company has a “right to this gain.” What does the president mean by this statement? Do you agree? 3. Three expense recognition methods (associating cause and effect, systematic and rational allocation, and immediate recognition) were discussed in the chapter…On November 1, 2022, SAN JOSE receives an order from a customer for a computer as well as 12 months of technical support. The company delivers the computer to customer on same day (Dec 1). The customer paid the P 50,400 upfront. The computer sells for P 36,000- standalone price.What is the total revenue to be recognized at Dec. 31, 2022?During the month of March, Harley's Computer Services made purchases on account totaling $46,100. Also, during the month of March, Harley was paid $11,900 by a customer for services to be provided in the future and paid $38,200 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $78,600, what is the balance in accounts payable at the end of March? Mutiple Choice 86,500 98,400 7,900 74,600 6,200
- Below are transactions for Lobos, Inc., during the month of December. Calculate the amount of revenue to recognize in December. If the transaction does not require the company to recognize a revenue, indicate how it would report the transaction. a. Receive $1,200 cash from customers for services to be provided next month. b. Perform $900 of services during the month and bill customers. Customers are expected to pay next month. c. Perform $2,300 of services during the month and receive full cash payment from customers at the time of service.Seacost Magazine sells subscriptions for $36 for 18 issues. The company collects cash in advance and then mails out the magazines to subscribers each Apply the revenue recognition principle to determine A. when seacost magazine should record revenue for this situation B. the amount fo revenue seacost magazine should record for eight issuesQuestion: How much is her EBIT at the end of the first month? We are at the end of the first month of her operations. She sold one half of her CDs sbought at the beginning to satisfy her customers. Individual customers paid in cash, but she also sold some CDs to disco clubs and these customers received invoices, which are due in two months. The table below summarizes her revenues in the first month: individual customers USD 90 000 disco club 1 USD 40 000 disco club 2 USD 50 000 At the end of the month Mrs. Hiphop paid in cash a rent (USD 25 000), bank loan interest (USD 1000) and her salary (USD 30 000) - everything paid and used during the first month. She has also received an invoice for utilities used during the first month (USD 2 000), which will be paid in 30 days. Equipment is depreciated using straight line method for 20 months starting from the first month (now). During the first month she…