For the following indenendent cases, in the space provided, calculate the amount of revenuethat should be recordeu in 2019 under the revenue recognition principle (point of sale).1. Company A rents office space to tenants. On October 1, 2019 they collected$18,000 from a tenant which represents 12 month's rent paid in advance.2. Company B sells heavy equipment. On December 1, 2019 a customer paid a$10,000 deposit towards the purchase of a $50,000 piece of equipment. Theequipment was delivered on January 16, 2020 and the balance was paid that date.3. On December 29, 2019 Company C ships $15,000 worth of goods to a customer, F. O.B. destination. The goods arrive on January 3, 2020at the customer's office. Thecustomer pays for the goods On February 1, 2020.4. Company D provides legal services for clients. On December 2, 2019 a client hires thefirm and pays a $10,000 advance payment. The firm did $4,ĝ00 of service in 2019.

For the following indenendent cases, in the space provided, calculate the amount of revenue that should be recordeu in 2019 under the revenue recognition principle (point of sale). 1. Company A rents office space to tenants. On October 1, 2019 they collected $18,000 from a tenant which represents 12 month's rent paid in advance.

For the following indenendent cases, in the space provided, calculate the amount of revenue that should be recordeu in 2019 under the revenue recognition principle (point of sale). 1. Company A rents office space to tenants. On October 1, 2019 they collected $18,000 from a tenant which represents 12 month's rent paid in advance.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 2MCQ: In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in...

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In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize: a. $8,000 of revenue and $600 of expense. b. $8,000 of revenue and $0 of expense. c. $3,500 of revenue and $600 of expense. d. $3,500 Of revenue and $0 of expense.
Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.
Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.
For the following independent cases, in the space provided, calculate the amount of revenue that should be recorded in 2019 under the revenue recognition principle (point of sale). O they collect dvane rent 1. ompany 18,000 19 a customer paid a uipment. The was delivered on January 16, 2020 and the balance was pad that date. equipment. On December $50,000 2. wards the eq 3. On December 29, 2019 Company C ships $15,000 worth of goods to a customer, F. O. B. destination. The goods arrive on January 3, 2020at the customer's office. The customer pays for the goods On February 1, 2020.
On June 7,2019, Dilby Mechanical Corp completed $50,00 of servicing work for a client and billed them for that amount plus a GST of $2,500 and PST of $3,50; terms are N20. Required: a. Prepare the journal entry as it would appear in Dilby's accounting records. b. Assume the receivable established on June 7 was collected on June 27. Record the entry.
For each independent case listed below, answer the related question(s). You must show your calculations and provide explanations (i.e definitions, methods) where needed to support your answers.1. Caps company rents a building on March 1 2019 and starts the business on June 15, 2019. The company estimates a monthly income of OR 4,500 from selling taxable supplies. State when (i.e. date) and why, if at all, the company is liable to register for VAT.2. Taxpayer C earns a $ 310,000 annual salary and pays 17% income tax. If tax rates increase to 25% and taxpayer C would like to maintain his current standard of living, how he will respond to the tax rate increase: (a) in a manner consistent with income effect and (b) in a manner consistent with substitution effect.3. Laser Jet Company provides printing services to its customers. During May, the company provided customer A services for OR 1,500. According to VAT, how much customer A should pay to Laser Jet? And explain what type of VAT is…
On 1 January 2020, a tenant paid OMR 18000 in advance for rental to Dhofar LLC for the next six months. At the end of April 2020, 4 month advanced rental amount has been expired. Record the expired rental income at the end of April 2020. Select one: a. Date Particulars Debit (OMR) Credit (OMR) April 30 Prepaid Rental Income Dr. Rental Income Cr. 18000 18000 b. Date Particulars Debit (OMR) Credit (OMR) April 30 Cash Dr. Unearned Rental Income Cr. 18000 18000 c. Date Particulars Debit (OMR) Credit (OMR) April 30 Rental Income Receivable Dr. Rental Income Cr. 12000 12000 d. Date Particulars Debit (OMR) Credit (OMR) April 30 Prepaid Rental Income Dr. Rental Income Cr. 12000 12000 e. Date Particulars Debit (OMR) Credit (OMR) April 30 Rental Expenses Dr. Prepaid Rent Cr. 12000 12000 f. Date Particulars Debit (OMR) Credit (OMR) April 30 Unearned Rental Income Dr. Rental…
In 2018, DFS Medical Supply collected rent revenue for 2019 tenant occupancy. For income tax reporting, the rentis taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy the rental property. The deferred portion of the rent collected in 2018amounted to $300,000 at December 31, 2018. DFS had no temporary differences at the beginning of the year.Required:Assuming an income tax rate of 40% and 2018 income tax payable of $950,000, prepare the journal entry to recordincome taxes for 2018.
Rasheed Company uses net method to record the sales made on credit. On June 30, 2019, it made sales of $45,000 with term 2/15, n/45. Prepare the required journal entries, if: On July 22 Rasheed company received full payment.
You are given the following information: On 01/04/2019, the company XPSO paid to the owner of the property (company KLM) the rents for one year with a total amount of € 66,000. At the time of payment, the account was charged prepaid rents. The landlord displayed the amount of rent collection in an obligation account. The payment of rents concerns the same property. Requested: Α. Relevant calendar entries 01/04/2019, 31/12/2019, 01/04/2020 for the company XPSO Β. Relevant calendar entries 01/04/2019, 31/12/2019, 01/04/2020 for the company KLM You are given the following information: The company DELTA 01/05/2019 received a long-term loan from the National Bank of Greece amounting to 205,000 with an annual interest rate of 7%. Interest is charged twice a year 30/4 and 31/10. The repayment of the full amount of the loan will take place on 30/04/2024. Requested: The relevant calendar entries 01/05/2019, 31/10/2019, 31/12/2019, 30/04/2020 and 31/10/2020 and 31/12/2020 for the company…
On December 1, 2018, Davenport Company sold merchandise to a customer for $20,000. In payment for themerchandise, the customer signed a 6% note requiring the payment of interest and principal on March 1, 2019.How much interest revenue will the company recognize during 2018? In 2019?
Below are transactions for Hurricane Company during 2021. On October 1, 2021, Hurricane lends $7,600 to another company. The other company signs a note indicating principal and 6% interest will be paid to Hurricane on September 30, 2022. On November 1, 2021, Hurricane pays its landlord $2,400 representing rent for the months of November through January. The payment is debited to Prepaid Rent for the entire amount. On August 1, 2021, Hurricane collects $11,520 in advance from another company that is renting a portion of Hurricane’s factory. The $11,520 represents one year's rent and the entire amount is credited to Deferred Revenue. Depreciation on machinery is $4,100 for the year. Salaries for the year earned by employees but not paid to them or recorded are $3,600. Hurricane begins the year with $800 in supplies. During the year, the company purchases $4,100 in supplies and debits that amount to Supplies. At year-end, supplies costing $2,100 remain on hand. Record…