Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2015, Deluxe collected $60,300 in advance on
Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2015, Deluxe collected $60,300 in advance on a six-month contract for work to be performed evenly during the next six months. Assume that Deluxe closes its books and issues financial reports on a monthly basis. a. Prepare the entry on January 1 to record the receipt of $60,300 cash for contract work (1) using the financial statements effect template and (2) in journal entry form. b. Prepare the adjusting entry to be made on January 31, 2015, for the contract work done during January (1) using the financial statements effect template and (2) in journal entry form. C. At January 31, a total of 33 hours of hourly rate custodial work was unbilled. The billing rate is $25 per hour. Prepare the adjusting entry needed on January 31, 2015, (1) using the financial statements effect template and (2) in journal entry form. (The firm uses the account Fees Receivable to reflect amounts due but not yet billed). Financial statement effects template Journal entries Noncash Assets Earned Capital Contrib. Capital 0 Net income Asset Revenues - Liabilities 0 Expenses 0 0 0 0 0 0 Transaction a. Entry on January 1 to record the receipt ofcash for contract work. b. Adjusting entry on January 31, 2015for the contract work done during January c. Adjusting entry on January 31, forunbilled custodial work. Please answer all parts of the question. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started