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nignag [31]
3 years ago
15

On October 1, Sponge Bob, Inc. received $240 up front from a customer for a yearly magazine subscription. Magazines are provided

one per month.
Record the following journal entries.
a. Record the initial receipt of payment from the customer on October 1.
b. Record the adjusting entry for three months of magazines provided to the customer by December 31
Business
1 answer:
ddd [48]3 years ago
4 0

Answer:

a.

Oct 1   Cash                                                         $240 Dr

               Unearned Subscription Revenue            $240 Cr

b.

Dec 31   Unearned Subscription Revenue                      $60 Dr

                    Subscription Revenue                                        $60 Cr

Explanation:

a.

The receipt of $240 upfront in advance from a customer is a liability for the business as the business has received cash for service that is yet to be provided. The business will record this as a debit to the cash account and credit to a liability account of  Unearned Service Revenue.

b.

On 31 december, the business has provided magazines for 3 months thus it has earned revenue for 3 months. The revenue for 3 months is,

Revenue per month = 240 / 12 = 20

For 3 months = 20*3  = 60

The business will record this as a credit to the subscription revenue and a debit to the unearned subscription revenue

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7 0
1 year ago
Jabiru Corporation purchased a 20% interest in Fish Company common stock on January 1, 2013 for $300,000. This investment was ac
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Answer:

$280,950

Explanation:

As for the information given:

Closing balance of investment on 31 December 2015 = $440,000

Now the following adjustments need to be made to calculate the balance as on 1 August 2016

Add: Share of income from Jan to Jul 2016 = $4,000 \times 7 months \times 20% = $5,600

Less: Dividend Received = $20,000 \times 20% = $4,000

Less: Amortization of patent = $6,000/12 \times 7 = $3,500

= $440,000 - $1,900 = $438,100

Since Jabiru sold half of its investment, thus, value of its half of the investment shall be:

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3 years ago
Fleet, Inc. manufactured 700 units of Product A, a new product, in 20Xl. Product Xs variable and fixed manufacturing costs per u
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Answer:

The change in the dollar amount of inventory is $200 due to change in the inventory costing method.

Explanation:

The variable cost per unit is $6.00 while the fixed cost per unit is $2.00

Variable cost per unit = $6.00

Absorption cost pet units = $8.00

Total cost under absorption costing = Absorption cost per unit / number of units in ending inventory

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Change in cost = Total absorption cost - Total variable cost

Change in cost = $800 - $600 = $200

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2 years ago
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Answer:

The correct options are I and II

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Answer:

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