9. On December 1, B&B Security Service collected three months worth of fees of $6,000 in advance of providing services. The amount was recorded as a credit to Unearned Security Service Fees. They provided the monthly service from that date forward. The December 31 adjustment will require Unearned Service Fees be: a. Credited for $2,000 b. Debited for $6,000 c. Credited for $6,000 d. Debited for $4,000 e. Debited for $2,000
Related questions
| CASH | |
| 8/1 balance | 6,000 |
| 8/3 | 500 |
| 8/5 | 400 |
| 8/7 | 900 |
| 8/2 $1,800 | 8/7 $900 |
Deposits received in advance (a liability account)
| 8/2 $1,800 | |
8/5 400 |
d. August 7
a. Sold club memberships on credit.
| Unearned Service Revenue | Service Revenue | |
| a | $1,000 | $9,000 |
| b | $1,000 | $10,000 |
| c | $11,000 | $1,000 |
| d | $9,000 | $10,000 |
Cactus Companyâs annual accounting year ends on June 30. Assumeit is June 30, and all of the entries except the followingadjusting journal entries have been made: |
| a. | The company earned service revenue of $1,900 on a special jobthat was completed June 29. Collection will be made during July; noentry has been recorded. | ||||||
| b. | On March 31, Cactus paid a six-month premium for propertyinsurance in the amount of $3,180 for coverage starting on thatdate. Cash was credited and Prepaid Insurance was debited for thisamount. | ||||||
| c. | At June 30, wages of $890 were earned by employees but not yetpaid. The employees will be paid on the next payroll date, which isJuly 15. | ||||||
| d. | On June 1, Cactus collected two monthsâ revenue of $440. At thatdate, Cactus debited Cash and credited Unearned Revenue for $440.One-half of it has now been earned but not yet recorded. | ||||||
| e. | Depreciation of $1,490 must berecognized on a service truck purchased on July 1 of the previousyear. | ||||||
| f. | Cash of $4,140 was collected on May 1 for services to berendered evenly over the next year beginning on May 1. UnearnedRevenue was credited when the cash was received. Some of it has nowbeen earned but not yet recorded. | ||||||
| g. | The company owes interest of $590 on a bank loan taken out onFebruary 1. The interest will be paid when the loan is repaid nextyear on January 31. | ||||||
| h. | The income after all adjustments except income taxes was$31,000. The companyâs federal income tax rate is 25%. Compute andrecord income tax expense.
| ||||||
