Answer:
Dr cash $375,000
Cr unearned revenue $375,000
Dr unearned revenue $37,500
Cr revenue $37,500
Explanation:
The total amount realized from the sale of tickets is $375,000($250*1500)
However,the cash proceeds should be debited to cash while it is also credited to unearned revenue
The revenue from fulfilling the performance obligation=1/10*$375,000=$37,500
The $37,500 is debited to unearned revenue and credited to sales revenue as that amount has now been earned
Answer:
<u>Journal 1</u>
Debit : Prepaid Expense $37,600
Credit : Cash $18,800
Credit : Insurance Expense $18,800
<u>Journal 2</u>
Debit : Dividends $18,000
Credit : Wages $18,000
Explanation:
Journal 1
The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.
Journal 2
The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.
Answer:
The correct answer is letter "B": Depreciation reduces the book value of assets
.
Explanation:
Depreciation shows how much and the value of the assets was used up. This also aims to balance an asset's cost to the revenue that the asset has helped the business gain. Used as an income tax deduction, depreciation calculations offer businesses an annual allowance for the use and deterioration of tangible (physical) assets.
<em>Depreciation reduces the book value of assets because, after the depreciation calculation is done, the amount computed decreases the current value of the asset it represents.</em>
Answer:
<u>e) accounts receivable</u>
Explanation:
a) <em>allowance for doubtful accounts:</em> this is used to determinate a provision of uncollectible account. Customers that will not honor their debts.
b)<em>prepaid expenses:</em> This is use for the payment in advance for utilities and other expenses like rent. The description does not involve any payment from Dr Torres.
c)<em>unearned revenues: </em>used when the customer pays the service or goods but the business didn't perform or deliver. The Dr has perform his services so they revenues are earned.
d) <em>intangible assets: </em>refers to trademarks, patents and other assets which related to the business. the customers account are tangible, they are a know value
e) <u>accounts receivable: correct.</u>
This represent the collectible amount from customers, which is exactly what it is happening. The Dr gives a certain amount of time to receive the payment for his services. While the services aren't paid, the Dr has "Accounts to receive"
