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Alisiya [41]
3 years ago
12

Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On January 1, 2015, Deluxe coll

ected $30,150 in advance on a six-month contract for work to be performed evenly during the next six months. Assume that Deluxe closes its books and issues financial reports on a monthly basis.
a. Prepare the entry on January 1 to record the receipt of $30,150 cash for contract work (1) using the financial statements effect template and (2) in journal entry form.
b. Prepare the adjusting entry to be made on January 31, 2015, for the contract work done during January (1) using the financial statements effect template and (2) in journal entry form.
c. At January 31, a total of 30 hours of hourly rate custodial work was unbilled. The billing rate is $19 per hour. Prepare the adjusting entry needed on January 31, 2015, (1) using the financial statements effect template and (2) in journal entry form. (The firm uses the account Fees Receivable to reflect amounts due but not yet billed).
Business
1 answer:
algol [13]3 years ago
4 0

Answer:

Since there is not enough room here, I prepared the financial statement effects template on an excel spreadsheet that I attached.

a)

January 1, unearned revenue

Dr Cash 30,150

    Cr Unearned service revenue 30,150

b)

January 31, accrued services

Dr Unearned service revenue 5,025

    Cr Service revenue 5,025

c)

January 31, service revenue from hourly custodial work

Dr Accounts receivable 570

    Cr Service revenue 570

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