!~~~~~Revenue and expense recognition Knowledge Ltd provides one-day training programs on accounting. It charges $5000 per day. The following events occurred during May 2019.
a Received $20 000 from accounts receivable for sales in previous months.
b Paid three months’ rent of $9000 that covers the period 1 May 2019 to 31 July 2019.
c Received orders for 70 days of training during the month. Delivered 50 of the days of training during the month and received payment for 30 of these days.
d Signed a contract to design a special program for lawyers at a price of $20 000. Design will commence in July. Received a $5000 deposit.
e Paid $400 000 for new equipment and $20 000 to install it.
f A contract was signed with a new CEO for $700 000 per year. The CEO will start on 1 July.
g Paid wages during the period of $60 000 with accrued wages of $5000 owing at the end of the month.
h Borrowed $12 000 on 1 May from the bank at 10 per cent per annum. Interest and principal repayable in three months.
Required:
1 Determine total revenue for the month of May 2019.
2 List all expenses for the month of May 2019.