Read each scenario, decide whether the company is using Cash basis or Accrual basis, and then enter your answers to the questions. The Orange Lily Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $1,610 for six months of advertising. Orange Lily Law Firm recorded $1,610 in the Prepaid Advertising account. If Orange Lily Law Firm had recorded their expenses using the other method, how much advertising expense would they have recorded for the two months ending February 28? Enter this value as a positive number. Safe 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, Safe Home has collected $3,630 from cash-paying customers. Safe Home's remaining customers owe the business $2,590. Safe Home recorded $3,630 of service revenue for the year. If Safe Home had recorded their service revenue using the other method, how much service revenue would they have recorded for the year? Splendid Occasions received $450 for services to be performed for the next 10 months on July 31 and recorded this transaction using the Unearned Revenue account. If Splendid 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 5: Received and paid electricity bill, $110 May 9: Received cash for meals served to customers, $3,870 May 23: Served a banquet on account, $2,400 May 31: Accrued salary expense, $2,780 May 31: Recorded prepaid insurance expired, 5680 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. If 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. Cash Supplies Expense Franchise Copyright Depreciation Expense-Furniture Common Stock Fill in the t-accounts for each situation and label each transaction as Deferrals/Prepaid, Accrual, or Depreciation. Use Unadj. Bal, as the label for the opening balance of each account. Calculate the adjusted balance and use a Bal. posting reference to show the ending balance of each account. Enter each transaction on the first available line in the T-Account Customers were billed for $4,020 for work completed. The Service Revenue unadjusted balance as of December 31 is $7,000. Adjustment Type: Accounts Receivable Service Revenue Recieved a bill for utilities for $7,920 which will be paid next month. Adjustment Type: Utilities Expense Utilities Payable The unadjusted balance Office Supplies at Dec. 31 is 57,700 and at year end the office supplies on hand totaled $2,740. Adjustment Type: Supplies Expense Office Supplies 4 Journalize the adjusting entry needed at December 31 for each situation. Record debits first, then credits. Check your spelling carefully and do not abbreviate. Use account names exactly as given in the Chart of Accounts. Used office supplies of $3,600. Date Accounts and Explanation Debit Credit Employees earned $1,800 in salaries that will be paid next month. Date Accounts and Explanation Debit Credit Insurance for the next six months was paid on November 1st in the amount of $810. Record the journal entry for the two months of insurance expired at year-end. Date Accounts and Explanation Debit Credit