Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 3: Q17SE_2 (page 161)

On September 1, 2018, Salem Landscaping collected $24,000 in advance from customers for landscaping services. The service revenue will be earned monthly over the 12-month period ending August 31, 2019. Requirements 1. Journalize the entry on September 1 by using the alternative treatment of deferred revenues. 2. Record the December 31, 2018 adjusting entry

Short Answer

Expert verified

Date

Account and Explanation

Debit

Credit

31-12-2018

Service Revenue

$16,000

Unearned Revenue

$16,000

To record unearned revenue

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation of Entry

On December 31, 2018, adjusting entry for unearned revenue will be recorded by debiting service revenue and crediting unearned revenue by $16,000, respectively, to record unearned revenue.

02

Calculation of Revenue Earned

Revenue earned is calculated as follows:

RevenueEarned=AmountReceived×NumberofMonthsExpiredMonthsPerYear=$24,000×412=$8,000

03

Calculation of Unearned Revenue

Unearned revenue is calculated as follows:

UnearnedRevenue=AmountReceived−RevenueEarned=$24,000−$8,000=$16,000

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Question :At the end of June, Gerber Dental had performed $9,000 of dental services but has not yet billed customers. Record the adjusting entry for accrued revenue.

On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.

Question :The worksheet of Best Jobs Employment Service follows but is incomplete.The following data at April 30, 2018, are given for Best Jobs Employment Service: a. Service revenue accrued, \(700. b. Office supplies used, \)300. c. Depreciation on equipment, \(1,300. d. Salaries owed to employees, \)1,400. Requirements 1. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters a through d to label the four adjustments. 2. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 3. Prepare each adjusting journal entry calculated in Requirement 1. Date the entries, and include explanations

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 a. cash basis? b. accrual basis?

Question :The worksheet of Macey’s Landscaping Services follows but is incomplete.Requirements 1. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 2. Describe each adjusting entry. For example, a. Prepaid rent expires, $1,150.
See all solutions

Recommended explanations on Business Studies Textbooks

Managerial Economics

Read Explanation

Strategic Direction

Read Explanation

Nature of Business

Read Explanation

Influences On Business

Read Explanation

Business Development

Read Explanation

Strategic Analysis

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free