Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A clear format would be much appreciated I've already answered most questions but need to check my work thank you Read each scenario, decide whether

A clear format would be much appreciated

I've already answered most questions but need to check my work

thank you

image text in transcribed
Read each scenario, decide whether the company is using Cash basis or Accrual basis, and then enter your answer to the question. The Purple Tulip Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $2, 100 for six months of advertising. Purple Tulip Law Firm recorded $2, 100 in the Prepaid Advertising account. f Purple Tulip Law Firm had recorded their expenses using the other method, how much advertising expense would they have recorded or the two months ending February 28? Enter this value as a positive number. Secure Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Secure Home has collected $70 from for the year. cash-paying customers. Secure Home's remaining customers owe the business $2,130. Secure Home recorded $70 of service revenue If Secure Home had recorded their service revenue using the other method, how much service revenue would they have recorded for the year? Marvelous Occasions received $3,870 for services to be performed for the n orded this transaction arned Revenue account. If Marvelous Occasions had recorded their service revenue using the other method, how much service revenue would they have recorded for the year? Sweet Catering completed the following selected transactions during May 2016: . May 1: Prepaid rent for three months, $2,700 . May 5: Received and paid electricity . May 9: Received cash for meals served to customers, $1,330 . May 14: Paid cash for kitchen equipment, May 25 served a banquet on account, $2,03 . May 31: Accrued salary expense, $930 . May 31: Recorded depreciation for May on kitchen equipment, $160 If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. f Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. Identify whether each account would appear on the Balance Sheet or the Income Statement. Accumulated Depreciation - Office Furniture Accumulated Depreciation - Truck Common Stock Advertising Expense Unearned Revenue Repairs and Maintenance Expense 3 Fill in the t-accounts for each situation and label each transaction as Deferrals/Prepaid or Accrual. Calculate the adjusted balance and use a Bal. post reference to show the ending balance of each account. Depreciation for the current year includes Equipment, $2,800. The Accumulated Depreciation - Equipment unadjusted balance as of December 31 is $7,300. Adjustment Type: Depreciation Expense - Equipment Accumulated Depreciation - Equipment A two year insurance policy for $10,560 was purchased on November 1 of the current year. Record the transaction for the year ended December 31. Adjustment Type: Insurance Expense Prepaid Insurance Customers were billed for $2,200 for work completed. The Service Revenue unadjusted balance as of December 31 is $6,200. Adjustment Type: Accounts Receivable Service Revenue Journalize the adjusting entry needed at December 31 for each situation. Use the Chart of Accounts to review account names! Completed services that were paid for six months earlier, $4,500 Date Accounts and Explanation Debit Credit Used office supplies of $1,000 Date Accounts and Explanation Debit Credit Used prepaid insurance of $3,500 Date Accounts and Explanation Debit Credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

12th edition

978-1133952428, 1285078578, 1133952429, 978-1285078571

Students also viewed these Accounting questions