Olney Cleaning Company had the following items that require adjustment at year end. a. For one cleaning

Question:

Olney Cleaning Company had the following items that require adjustment at year end.
a. For one cleaning contract, $14,520 cash was received in advance. The cash was credited to Unearned Service Revenue upon receipt. At year end, $1,210 of the service revenue was still unearned.
b. For another cleaning contract, $9,840 cash was received in advance and credited to Unearned Service Revenue upon receipt. At year end, $3,280 of the services had been provided.
Required:
1. Prepare the adjusting journal entries needed at December 31.
2. What is the effect on the if these adjusting entries are not made?
3. What is the balance in Unearned Service 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...