College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 14, Problem 5SEB
ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS Set up T accounts for Cash, Unearned Ticket Revenue, and Ticket Revenue. Post the following two transactions to the appropriate accounts, indicating each transaction by letter:
- (a) Sold 1,200 season tickets at $20 each, receiving cash of $24,000.
- (b) An end-of-period adjustment is needed to recognize that $19,000 in ticket revenue has been earned.
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On December 1, Oren Marketing Company received $4,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. The cash receipt was recorded as unearned revenue. The adjusting entry for the year ended December 31 would include:
Mutiple Choice
a debit to Services Revenue for $3,000.
a credit to Unearned Revenue for $1,500.
a debit to Unearned Revenue for $2,250.
a credit to Services Revenue for $3,000.
a debit to Services Revenue for $4,500.
Up & Away Airlines has provided the following information regarding cash received for ticketsales in September and October:Cash received in September for October fl ights $500,000Cash received in October for October fl ights 300,000Cash received in October for November fl ights 400,000Apply the realization principle to determine how much revenue Up & Away Airlines should reportin its October income statement.
Adjustment data at December 31 follow:a. On December 15, Aurora contracted to perform services for a client receiving$2,800 in advance. Aurora recorded this receipt of cash as Unearned Revenue. Asof December 31, Aurora has completed $1,800 of the services.b. Aurora prepaid two months of rent on December 1.
Aurora used $600 of office supplies.d. Depreciation for the equipment is $700.e. Aurora received a bill for December’s online advertising, $1,000. Aurora will notpay the bill until January. (Use Accounts Payable.)f. Aurora pays its employees on Monday for the previous week’s wages. Its employeesearn $1,500 for a five-day workweek. December 31 falls on Wednesday this year.g. On October 1, Aurora agreed to provide a four-month air system check (beginningOctober 1) for a customer for $3,000. Aurora has completed the system check everymonth, but payment has not yet been received and no entries have been made.Requirements1. Journalize the adjusting entries on December 31.2. Using the…
Chapter 14 Solutions
College Accounting, Chapters 1-27
Ch. 14 - Under the periodic inventory system, the beginning...Ch. 14 - Under the periodic inventory system, the ending...Ch. 14 - The cash received in advance before delivering a...Ch. 14 - Unearned revenue is adjusted into an expense...Ch. 14 - Sales Returns and Allowances is classified as a...Ch. 14 - Under the periodic inventory system, what account...Ch. 14 - Under the periodic inventory system, what account...Ch. 14 - Under the periodic inventory system, what account...Ch. 14 - Unearned revenue is classified as what type of...Ch. 14 - Under the perpetual inventory method, what account...
Ch. 14 - Prepare the cost of goods sold section for Josephs...Ch. 14 - The Venice Theatre sold and collected cash of...Ch. 14 - Information relating to inventory for Janie Par...Ch. 14 - Using the spreadsheet provided below, prepare the...Ch. 14 - Prob. 5CECh. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - What spreadsheet amounts are used to compute cost...Ch. 14 - Why are both the debit and credit amounts in the...Ch. 14 - What is an unearned revenue?Ch. 14 - Give three examples of unearned revenue.Ch. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - A firm is preparing to make adjusting entries at...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - MERCHANDISE INVENTORY ADJUSTMENTS: PERIODIC...Ch. 14 - DETERMINING THE BEGINNING AND ENDING INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRIES FOR A MERCHANDISING...Ch. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - ADJUSTMENTS FOR A MERCHANDISING BUSINESS:...Ch. 14 - JOURNALIZE ADJUSTING ENTRY FOR INVENTORY...Ch. 14 - PREPARATION OF ADJUSTMENTS ON A SPREADSHEET FOR A...Ch. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - ADJUSTMENT FOR MERCHANDISE INVENTORY USING T...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - CALCULATION OF COST OF GOODS SOLD: PERIODIC...Ch. 14 - ADJUSTMENT FOR UNEARNED REVENUES USING T ACCOUNTS...Ch. 14 - MERCHANDISE INVENTORY ADJUSTMENTS: PERIODIC...Ch. 14 - DETERMINING THE BEGINNING AND ENDING INVENTORY...Ch. 14 - JOURNALIZE ADJUSTING ENTRIES FOR A MERCHANDISING...Ch. 14 - JOURNAL ENTRIES UNDER THE PERPETUAL INVENTORY...Ch. 14 - ADJUSTMENTS FOR A MERCHANDISING BUSINESS:...Ch. 14 - JOURNALIZE ADJUSTING ENTRY FOR INVENTORY...Ch. 14 - Prob. 12SPBCh. 14 - WORKING BACKWARD FROM ADJUSTED TRIAL BALANCE TO...Ch. 14 - A friend of yours recently opened Abracadabra, a...Ch. 14 - Jason Tierro, an inventory clerk at Lexmar...Ch. 14 - John Neff owns and operates Waikiki Surf Shop. A...Ch. 14 - Block Foods, a retail grocery store, has agreed to...
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- The Venice Theatre sold and collected cash of 45,000 for season tickets. Upon collection of cash, Unearned Ticket Revenue was credited. At the end of the accounting period, 15,000 had been earned. Make the appropriate adjusting entry.arrow_forwardEXPENSE METHOD OF ACCOUNTING FOR PREPAID EXPENSES Davidsons Food Mart paid 1,200 in advance to the local newspaper for advertisements that will appear monthly. The following entry was made: At the end of the year, December 31, 20--, Davidson received notification that advertisements costing 800 had been run. Prepare the adjusting entry.arrow_forwardEXPENSE METHOD OF ACCOUNTING FOR PREPAID EXPENSES Ryans Fish House purchased supplies costing 3,000 for cash. This amount was debited to the supplies expense account. At the end of the year, December 31, 20--, an inventory showed that supplies costing 500 remained. Prepare the adjusting entry.arrow_forward
- Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?arrow_forwardReversing Entries Thomas Company entered into two transactions involving promissory notes and properly recorded each transaction. 1. On November 1, it purchased land at a cost of 8,000. It made a 2,000 down payment and signed a note payable agreeing to pay the 6,000 balance in 6 months plus interest at an annual rate of 10%. 2. On December 1, it accepted a 4,200, 3-month, 12% (annual interest rate) note receivable from a customer for the sale of merchandise. On December 31, Thomas made the following related adjustments: Required: 1. Assuming that Thomas uses reversing entries, prepare journal entries to record: a. the January 1, reversing entries b. the March 1, 4,326 collection of the note receivable c. the May 1, 6,300 payment of the note payable 2. Assuming instead that Thomas does not use reversing entries, prepare journal entries to record the collection of the note receivable and the payment of the note payable.arrow_forwardDo not copy from bartleby On December 1, Oren Marketing Company received $4,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. The cash receipt was recorded as unearned revenue. The adjusting entry for the year ended December 31 would include: Mutiple Choice a debit to Services Revenue for $3,000. a credit to Unearned Revenue for $1,500. a debit to Unearned Revenue for $2,250. a credit to Services Revenue for $3,000. a debit to Services Revenue for $4,500.arrow_forward
- Journalizing and posting an adjusting entry for unearned revenue Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period. Requirements Record the journal entry to record the original receipt of $180,000 cash. Record the adjusting entry that Eastside Magazine makes to record earning $8,000 in subscription revenue that was collected in advance. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances after adjustments. (Ignore the Cash account.)arrow_forwardAdjustment data at December 31 follow:a. On December 15, Canton contracted to perform services for a client receiving $2,000 in advance. Canton recorded this receipt of cash as Unearned Revenue. As of December 31, Canton has completed $1,800 of the services.b. Canton prepaid two months of rent on December 1.c. Canton used $400 of office supplies during the month.d. Depreciation for the equipment is $700.e. Canton received a bill for December’s online advertising, $400. Canton will not pay the bill until January. (Use Accounts Payable.)f. Canton pays its employees weekly on Monday for the previous week’s wages. Its employees earn $2,000 for a five-day workweek. December 31 falls on Wednesday this year.g. On October 1, Canton agreed to provide a four-month air system check (beginning October 1) for a customer for $2,040. Canton has completed the system check every month, but payment has not yet been received and no entries have been made.arrow_forwardPREPARE ADJUSTED TRIAL BALANCE BY USING THE INFORMATION On December 1, 2020, Sheridan Distributing Company had the following account balances. Debit Credit Cash $7,500 Accumulated Depreciation—Equipment $2,640 Accounts Receivable 4,900 Accounts Payable 4,500 Inventory 12,200 Salaries and Wages Payable 1,000 Supplies 1,300 Owner’s Capital 44,160 Equipment 26,400 $52,300 $52,300 During December, the company : Dec. 6 Paid $1,800 for salaries and wages due employees, of which $800 is for December and $1,000 is for November salaries and wages payable. 8 Received $1,900 cash from customers in payment of account (no discount allowed). 10 Sold merchandise for cash $6,500. The cost of the merchandise sold was $3,900. 13 Purchased merchandise on account from Boehm Co. $9,000, terms 2/10, n/30. 15 Purchased supplies for cash $1,600. 18 Sold merchandise on account $12,800, terms 3/10, n/30. The…arrow_forward
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