Answer:
Part (1) November 1
The amount paid is the rental advances and must be recorded as advances which falls under the current asset category:
Dr Rental Advances $90,000
Cr Bank account $90,000
Part (2) December 31
On this date, some of the rental advances paid would be realized as expenses from the period November 1, 20X1 to December 31, 20X2.
This time duration constitutes to 2 months and the rental advance made on November were for five months. Out of these 5 months, 2 months share must be recognized as expense which is
The relevant entry would be:
Dr Rental Expenses $36,000
Cr Rental Advances $36,000
Answer:
When accounting for revenue over time for a long-term contract, the percentage of completion used to recognize revenue in the first year usually is determined by measuring Costs incurred in the first year, divided by estimated total costs for the completed project
Explanation:
The percentage of completion method of revenue recognition is a concept in accounting that refers to a method by which a business recognizes revenue on an ongoing basis depending on the stages of a project’s completion.
In other words, the percentage of completion method is used for longer-term projects and recognizes revenue and expenses as a percentage of the project’s completion during the period.
These are good ways for the service provider to address the intangibility characteristic of services.
When something is intangible, it means it can not be touched. When a customer receives a dog that was well groomed, and happy with the service that can not be passed directly on to another client. The testimonials help a potential customer see what they could get out of the service for their animal, though it can't be "touched".
The percent of increase is 1%. To figure this out, simply reason that 1% of $100 is $1. Therefore, because $300 is a threefold increase, 1% would be $3.
