What is the journal entry for this transaction? Please explain. Thanks. On June 1, the entity completed negotiations with another client and accepted an advance of P210,000 for services to be performed in the next year. The P210,000 was credited to Unearned Service Revenue.
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On June 1, the entity completed negotiations with another client and accepted an advance of P210,000 for services to be performed in the next year. The P210,000 was credited to Unearned Service Revenue.
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- In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize: a. $8,000 of revenue and $600 of expense. b. $8,000 of revenue and $0 of expense. c. $3,500 of revenue and $600 of expense. d. $3,500 Of revenue and $0 of expense.Assume that a lawyer bills her clients $15000 on June 30, for services rendered during June. The lawyer collects $8500 of the billings during July and the remainder in August. Under the accrual basis of accounting, when would the lawyer record the revenue for the fees? A. June, $15,000; July, $0; and August, $0 B. June, $0; July, $6,500; and August, $8,500 C. June, $8,500; July, $6,500; and August, $0 D. June, $0; July, $8,500; and August, $6,500Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. provided legal services to client, who paid at the time of service B. received cash for legal services performed last month C. received cash from clients for future services to be provided D. provided legal services to client, to be collected next month
- On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. During the period, the company completed $6,200 of the agreed-on services for the client. There was no beginning balance in the Unearned Revenue account for the period. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustmentConsider each of the following scenarios: a. A seller orally agrees with one of its best customers to deliver goods in exchange for 10,000. While the sellers practice is to obtain a written sales agreement, the seller delivered these goods to the customer without a written agreement due to the customers urgent need. b. A seller agrees to provide accounting services to a customer for the next year in exchange for 40,000. While the two parties are negotiating the terms of the agreement and the specific services to be performed, the seller begins to perform some services as a gesture of good faith. c. A seller has a written agreement to deliver goods to a customer for 50 per unit. The price will drop to 45 per unit if the customer purchases more than 2,000 units per month. d. A seller had a written agreement and provided custodial services to a customer for 2,000 per month in a previous year. The contract expired on December 31, 2019. During negotiations for a new contract in January 2020, custodial services were provided at the previous monthly rate and paid for by the buyer. The seller and the customer agree to a new contract on February 1, 2020. The seller is concerned whether a contract existed in January 2020 and whether revenue can be recognized. Required: 1. Determine if a contract exists for each of the scenarios. 2. If it is determined that a contract exists but the seller believes it is probable that it will not collect the expected consideration, how does this affect the sellers ability to recognize revenue?Taylor Company recently purchased a piece of equipment for $2,000 which will be paid within 30 days after delivery. At what point would the event be recorded in Taylors accounting system? When Taylor signs the agreement with the seller When Taylor receives an invoice (a bill) from the setter When Taylor receives the asset from the seller When Taylor pays $2.000 cash to the seller
- The company receives a $500,000 payment from a client. Half of this payment is for services that the company had previously performed for the client, while the other half of the payment is a retainer fee for services to be performed in the future. Provide the journal entry that would be necessary to record the transaction.On December 31, Year 1, a company signed a one-year contract to provide services to a particular customer for $12,000. The customer will pay for the services during January Year 2. Using accrual accounting, when should the company recognize revenue relating to the contract? on December 31, Year 1, when the contract is signed on December 31, Year 2, after all services have been provided in January Year 2, when the cash is received throughout Year 2, as the revenue is earnedOn December 31, Year 1, a company signed a one-year contract to provide services to a particular customer for $12,000. The customer will pay for the services during January Year 2. Using accrual accounting, when should the company recognize revenue relating to the contract?
- The company receives a $500,000 payment from a client. Half of this payment is for services that the company had previously performed for the client, while the other half of the payment is a retainer fee for services to be performed in the future. For each element of the fundamental accounting equation (A, L, E), indicate whether that element increases, decreases, or ultimately remains unchanged.Assuming the entity received a cash worth of 50,000, this 50,000 is from the customer who advances payment for the service to be render next month. The proper credit for this transaction is: a.) Accounts Payable b.) Unearned Revenue c.) Owner’s Equity d.) Service RevenueAssuming the entity received a cash worth of 80,000, this 80,000 is from the customer who advances payment for the service to be render next month. The proper credit for this transaction is: a. Service Revenue b. Accounts Payable c. Owner’s Equity d. Unearned Revenue
