Question

Athens Delivery Service is hired on October​ 31, 2018 to perform​ services, beginning on November​ 1, 2018. The delivery services will be performed for six months at a rate of $ 2 comma 600 per month. ​ Athens' fiscal year ends on December 31. What amount of service revenue should be recorded as an adjusting entry on December​ 31, 2018?

Answer 1

$5200 is the amount of service revenue should be recorded as an adjusting entry on December​ 31, 2018

Solution:

Athens Delivery Service is hired on October​ 31, 2018 to perform​ services:

=> 6 month contract at $2,600 a month

Then , Nov 1 - Dec 31 = 2 months

i.e 2,600 * 2 = $5200

$5200 is the amount of service revenue should be recorded as an adjusting entry on December​ 31, 2018