Olney Cleaning Company had the following items that require adjustment at year-end. a. For one cleaning contract,
Question:
a. For one cleaning contract, $10,500 cash was received in advance. The cash was credited to unearned revenue upon receipt. At year-end, $1,250 of the service revenue was still unearned.
b. For another cleaning contract, $8,300 cash was received in advance and credited to unearned revenue upon receipt. At year-end, $2,700 of the services had been provided.
Required:
1. Prepare the adjusting journal entries needed at December 31.
2. What is the effect on the financial statements if these adjusting entries are not made?
3. What is the balance in unearned revenue at December 31 related to the two cleaning contracts? Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Step by Step Answer:
1 Date Account and Explanation Debit Credit Dec 31 Unearned Service Revenue 9250 Service Revenue 925...View the full answer
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Related Book For 
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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