The following data are taken from the comparative balance sheets o\' Midway Billiards Club, which prepares its financial statements using the accrual basis of accounting.

Ices arc billed to members based upon their use oi the club's facilities. Unearned fees arise from the sale of gilt certificates, which members can applj to their future use of club facilities.
Ihe 2()i )(i income statement tor the club showed that tees revenue ot $153,000 was earned durum the year.
Instructions You will probabl) find it helpful to use 1 accounts to analyze these data.)

(a) Prepare journal entries for each of the following events that took place during 2006.
(1) Fees receivable from 2005 were all collected.
(2) Gift certificates outstanding at the end of 2005 were all redeemed.
(3) An additional $35,000 worth of gift certificates were sold during 2006. A portion of these were used by the recipients during the year: the remainder were still outstanding at the end of 2006.
(4) Fees for 2006 for services provided to members were billed to members.
(5) Fees receivable for 2006 (i.e.. those billed in item [4] above) were partially collected.

(b) Determine the amount of cash received by the club, with respect to fees, during 2006.

Transcribed Image Text:

December 31 2006 2005 Fees receivable from members $12.000 $ 9,000 Unearned fees revenue 17,000 20.000