Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In its 1st year of operation, Jetway Airlines paid Salaries Expense of $40 million. On December 31, it recorded an entry for additional Salaries Expense

image text in transcribed
image text in transcribed
In its 1st year of operation, Jetway Airlines paid Salaries Expense of $40 million. On December 31, it recorded an entry for additional Salaries Expense of $2 million that will be paid at the beginning of the 2nd year. What should Jetway report in the income statement and balance sheet for its first year ended December 31? Click the answer you think is right Income statement: Salaries Expense $42 million; Balance sheet: Salaries Payable $2 million Income statement: Salaries Expense $40 million; Balance sheet: Salaries Payable $0 Income statement: Salaries Expense $40 million; Balance sheet: Salarles Payable $2 million According to the revenue recognition principle, revenues should be recognized when or as the company performs acts promised to the customer. For many businesses, this condition is met at the point of delivery of goods or services. The following transactions occurred in September: Required: For each of the transactions, if revenue is to be recognized in September, indicate the amount. (Enter your answers in dollars but not in millions.) Amount $ 0 $ 0 Activity a. Gupple Enterprises Inc. issued $24 million in new common stock Chrome University received $30,740,000 cash for 106,000 five-game-season b. football tickets. None of the games have been played. c. Chrome played the first football game referred to in (b). Mell Construction Company signed a contract with a customer for the construction of a new $532,000 warehouse. At the signing, Mell received a check d. for $53,200 as a deposit to be applied against amounts earned during the first phase of construction Answer from Mell's standpoint. A popular snowboarding magazine company received a total of $2,000 today e from subscribers. The subscriptions begin in the next fiscal year. Answer from the magazine company's standpoint. Trus Tee Communications sold a $445 cell phone plan for service in September f. to a customer who charged the sale on his credit card. Answer from the standpoint of Trustee Communications $ 0 $ 0 $ 445

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

Wiley CIA Exam Review Test Bank Part 1 Essentials Of Internal Auditing

Authors: S. Rao Vallabhaneni

1st Edition

1119987237, 978-1119987239

More Books

Students also viewed these Accounting questions

Question

1. How can evolutionary theory explain prosocial behaviour?

Answered: 1 week ago

Question

What is human nature?

Answered: 1 week ago