Question

Bayside Technical Services signed a contract on a sixminusmonth job for a​ client, starting on March 1. Bayside will collect $ 24 comma 000 from its customer when the job is finished but the revenue is earned evenly over the six months. On March​ 31, before adjusting entries are​ made, Bayside's Accounts Receivable account had a debit balance of $ 6 comma 000. After the March 31 monthly adjusting entry has been​ made, what will be the balance in Accounts​ Receivable?A. Debit balance of $24,000 B. Debit balance of $10,000 ° C. Credit balance of $20,000 D. Debit balance of $4,000

Answer 1

Answer:

The answer is: B) Debit balance of $10,000

Explanation:

Accounts Receivable account is an asset, and when assets increase, they have to be debited.

Before any adjustment was made, Accounts Receivable had a $6,000 balance. The new contract is worth $24,000 hat shall be divided into 6 months, which means $4,000 per month.

So at the end of the month the $4,000 form the new contract must be added to Accounts Receivable. This has to be done be a debit record of 6,000, so the adjusted balance of the account is 10,000.