Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 3, Problem S3.2SE
Comparing cash and accrual basis accounting for revenues
| Learning Objective 1 |
Protection 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, Protection Home has collected $900 from cash-paying customers. Protection Home’s remaining customers owe the business $1,300.
How much service revenue would Protection Home have for the year under the
- cash basis?
- accrual basis?
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Learning Objective 2
S9-3 Applying the direct write-off method to account for uncollectibles
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Shawna Valley is an attorney in Los Angeles. Valley uses the direct write-off methoin
account for uncollectible receivables.
At April 30, 2018, Valley's accounts receivable totaled $19,000. During May, she eama
revenue of $22,000 on account and collected $15,000 on account. She also wrote off
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1. Use the direct write-off method to journalize Valley's write-off of the uncollecihe
receivables.
2. What is Valley's balance of Accounts Receivable at May 31, 2018?
Ultra Day Spa provided $93,650 of services during Year 1. All customers paid for the services with credit cards. Ultra submitted the
credit card receipts to the credit card company immediately. The credit card company paid Ultra cash in the amount of face value less
a 2 percent service charge.
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a. Record the credit card sales and the subsequent collection of accounts receivable in a horizontal statements model like the one
shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing
activity (FA). If an element is not affected by the event, leave the cell blank.
b. Based on this information alone, answer the following questions:
(1) What is the amount of total assets at the end of the accounting period?
(2) What is the amount of revenue reported on the income statement?
(3) What is the amount of cash flow from operating activities reported on the statement of cash flows?
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Egrane, Inc.s monthly bank statement showed the ending balance of cash of $14,800. The bank reconciliation for the period
showed an adjustment for a deposit in transit of $1,200, outstanding checks of $1,600, a NSF check of $560, bank service charges
of $24 and the EFT from a customer in payment of the customer's account of $1,200.
What journal entry should be recorded by Egrane for the EFT?
=32
Multiple Choice
Debit Cash and credit Sales Revenue for $1,200.
No journal entry is necessary for this item.
Debit Accounts Receivable and credit Cash for $1,200.
Debit Cash and credit Accounts Receivable for $1,20.
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Chapter 3 Solutions
Horngren's Accounting (12th Edition)
Ch. 3 - Prob. 1QCCh. 3 - Get Fit Now gains a client who prepays S540 for a...Ch. 3 - The revenue recognition principle requires...Ch. 3 - Adjusting the accounts is the process of Learning...Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - Prob. 7QCCh. 3 - A equity overstated income statement: expense...Ch. 3 - A worksheet Learning Objective 6 is a journal used...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...
Ch. 3 - What is the difference between cash basis...Ch. 3 - Which method of accounting (cash or accrual basis)...Ch. 3 - Prob. 3RQCh. 3 - What is a fiscal year? Why might companies choose...Ch. 3 - Under the revenue recognition principle, when is...Ch. 3 - Under the matching principle, when are expenses...Ch. 3 - When are adjusting entries completed and what is...Ch. 3 - What are the two basic categories of adjusting...Ch. 3 - What is a deferred expense? Provide an example.Ch. 3 - What is the process of allocating the cost of a...Ch. 3 - What is a contra account?Ch. 3 - Prob. 12RQCh. 3 - What does accumulated depreciation represent?Ch. 3 - Prob. 14RQCh. 3 - What is a deferred revenue? Provide an example.Ch. 3 - What is an accrued expense? Provide an example.Ch. 3 - What is an accrued revenue? Provide an example.Ch. 3 - What are the two rules to remember about adjusting...Ch. 3 - When is an adjusted trial balance prepared, and...Ch. 3 - Prob. 20RQCh. 3 - What is a worksheet, and how is it used to help...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - Comparing cash and accrual basis accounting for...Ch. 3 - Comparing cash and accrual basis accounting for...Ch. 3 - Applying the revenue recognition principle...Ch. 3 - S3-4 Applying the matching principle Learning...Ch. 3 - S3-5 Identifying types of adjusting entries...Ch. 3 - Journalizing and posting adjusting entries for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Journalizing and posting an adjusting entry for...Ch. 3 - Prob. S3.11SECh. 3 - Journalizing an adjusting entry for accrued...Ch. 3 - Preparing an adjusted trial balance Learning...Ch. 3 - Determining the effects on financial statements...Ch. 3 - Preparing a partial worksheet Learning Objective 6...Ch. 3 - Prob. S3A.16SECh. 3 - Prob. S3A.17SECh. 3 - E3-18 Comparing cash and accrual basis accounting...Ch. 3 - Comparing cash and accrual basis accounting and...Ch. 3 - Determining the amount of prepaid expenses...Ch. 3 - E3-21 Journalizing adjusting entries Learning...Ch. 3 - E3-22 Journalizing adjusting entries Learning...Ch. 3 - Journalizing adjusting entries Learning Objective...Ch. 3 - Journalizing adjusting entries and posting to...Ch. 3 - Journalizing adjusting entries and posting to...Ch. 3 - Preparing an adjusted trial balance Learning...Ch. 3 - Identifying the impact of adjusting entries on the...Ch. 3 - Journalizing adjusting entries and analyzing their...Ch. 3 - Using the worksheet to record the adjusting...Ch. 3 - Using the worksheet to prepare the adjusted trial...Ch. 3 - Understanding the alternative treatment of prepaid...Ch. 3 - Understanding the alternative treatment of...Ch. 3 - Journalizing adjusting entries and subsequent...Ch. 3 - Journalizing adjusting entries and identifying the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - Journalizing and posting adjustments to the...Ch. 3 - Using the worksheet to record the adjusting...Ch. 3 - Prob. P3A.38APGACh. 3 - Prob. P3.39BPGBCh. 3 - P3-40B Journalizing adjusting entries and...Ch. 3 - P3-41B Journalizing and posting adjustments to the...Ch. 3 - Prob. P3.42BPGBCh. 3 - Prob. P3.43BPGBCh. 3 - Prob. P3A.44BPGBCh. 3 - Using Excel to journalize and post adjusting...Ch. 3 - Prob. P3.46CPCh. 3 - Prob. P3.47PSCh. 3 - Tying It All Together Case 3-1
Before you begin...Ch. 3 - One year ago, Tyler Stasney founded Swift...Ch. 3 - Prob. 3.1EICh. 3 - Prob. 3.1FCCh. 3 - Prob. 3.1FSC
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