a.
Introduction: Unearned revenue is treated as a liability of the company and is reported under the balance sheet. It means that the amount has been received by the company for which the work has not been completed.
To prepare:
b.
Introduction: When advance received for the performance of a job is not considered as liability then it is considered as revenue. Revenue account is credited and the cash account is debited while
To prepare: Journal entries for the transaction of the company.
c.
Introduction: Income statement and balance sheet is prepared at the end of accounting year to reflect the financial performance and financial position of the company. The amount received but not earned can be considered as liability or revenue.
The amount of service revenue and unearned revenue reported in income statement and balance sheet respectively.
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FINANCIAL & MANAGERIAL ACCOUNTING (LL)(W
- Catherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardThe transactions completed by AM Express Company during March, the first month of the fiscal year, were as follows: Instructions 1. Enter the following account balances in the general ledger as of March 1: 2. Journalize the transactions for March, using the following journals similar to those illustrated in this chapter: single-column revenue journal (p. 35), cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), cash payments journal (p. 34), and twocolumn general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made. 3. Post the appropriate individual entries to the general ledger. 4. Total each of the columns of the special journals and post the appropriate totals to the general ledger; insert the account balances. 5. Prepare a trial balance.arrow_forwardPrepare journal entries to record the following transactions for the month of November: A. on first day of the month, issued common stock for cash, $20,000 B. on third day of month, purchased equipment for cash, $10,500 C. on tenth day of month, received cash for accounting services, $14,250 D. on fifteenth day of month, paid miscellaneous expenses, $3,200 E. on last day of month, paid employee salaries, $8,600arrow_forward
- Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.arrow_forwardJones, a company, prepares monthly Receivables and Payables ledger control accounts. At 1 June 20X5 the following balances existed in the company's records. Receivables ledger balances Dr $ 54,000 Payables ledger balances CR $ 43,000 During the month of June, the transactions of Jones included the $ Credit sales • 251,000 Cash sales -34,000 Credit sales returns 11,000 Amounts received from credit customers • 242,000 Dishonoured cheques • 500 Cash discounts allowed Irrecoverable debts written off 3,000 Increase in allowance for receivables 1,000 Interest charged to customers 1,200 - 1,400 Contras between receivables and payables -800 You are required to prepare the receivables ledger control account for the month of June, showing the balance as at 30 June 20X5.arrow_forwardOn December 1, the Accounts Receivable account had a $22.000 debit balance. During December the business eamed $10.500 in revenue on account and collected $13.200 from its-charge-account customers. After posting these transaction, the balance in the Accounts Receivable account on December 31 isarrow_forward
- prepare the journal entries and state the impact each transaction had on net incomearrow_forwardOn September 1, the balance of the Accounts Receivable control account in the general ledger of Ivanhoe Company was $10,790. The customers' subsidiary ledger contained account balances as follows: Hurley $1,320, Andino $2,710, Fowler $2,020, and Sogard $4,740. At the end of September, the various journals contained the following information. Sales journal: Cash receipts journal: General journal: Sales to Sogard $840, to Hurley $1,130, to Giambi $1,390, and to Fowler $1,210. Cash received from Fowler $1,370, from Sogard $2,300, from Giambi $280, from Andino $1,770, and from Hurley $1,100. An allowance is granted to Sogard $320. (a) (b) Post the various journals. Post the items as individual items or as totals, whichever would be the appropriate procedure. (No sales discounts given.) Accounts Receivable Date Explanation Ref. Sept. 1 Balance Debit Credit Balance V 10,790 S CRarrow_forwardTransactions related to revenue and cash receipts completed by Sycamore Inc. during the month of March 20Y8 are as follows:Mar. 2. Issued Invoice No. 512 to Santorini Co., $905.4. Received cash from CMI Inc., on account, for $205.8. Issued Invoice No. 513 to Gabriel Co., $220.12. Issued Invoice No. 514 to Yarnell Inc., $845.19. Received cash from Yarnell Inc., on account, $555.20. Issued Invoice No. 515 to Electronic Central Inc., $195.28. Received cash from Marshall Inc. for services provided, $160.29. Received cash from Santorini Co. for Invoice No. 512 of March 2.31. Received cash from McCleary Co. for services provided, $85.Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Use the following column headings for the cash receipts journal:Fees Earned Cr., Accounts Receivable Cr., and Cash Dr. Place a check mark (✓) in the Post. Ref. column to indicate when the accounts receivable subsidiary ledger should be posted.arrow_forward
- Prepare the following journal entry; all transactions listed occurred in January: The Company received the following January bills and paid with a check. These January charges were: Utilities Expense - $270, Telephone Service Expense - $1,350, Internet Service Expense - $ 840, and Cleaning Supplies Expense - $325, and Insurance Expense - $500.arrow_forwardPrepare journal entries for each transaction listed.a. At the end of June, bad debt expense is estimated to be $14,000.b. In July, customer balances are written off in the amount of $7,000.arrow_forwardHarris, Inc. incurred the following transactions during the month of February. Record the appropriate ones in the cash payments journal. Include posting references. a. On February 3, the company purchased $650 worth of supplies on account. The supplies account number is 15. b. On February 5, Harris, Inc. made a payment on account to Sanders Industries in the amount of $1,215 (Check No. 2214). c. On February 14, Harris, Inc. bought a one-year insurance policy for $1,500. The prepaid insurance account number is 14 (Check No. 2215). d. On February 22, Harris, Inc. paid monthly rent of $2,000. The rent expense account number is 63 (Check No. 2216). e. On February 26, Harris, Inc. purchased equipment making a down payment of $3,000 (Check No. 2217) and agreeing to pay the $4,000 balance in 30 days. The equipment account number is 18. If an amount box does not require an entry, leave it blank. Page: OTHER ACCOUNT DEBITED CK. NO. POST. ACCOUNTS CASH REF. ACCOUNTS DR. PAYABLE DR. CR. DATE 1. 3arrow_forward
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