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lianna [129]
3 years ago
12

Novak Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January

1, 2020, Novak entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,900 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,700. In addition, Walleye agrees to pay an additional $21,800 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract.
Required:
a. Prepare the journal entries for Tyler in 2019 and 2020 related to this service contract.
b. Prepare the journal entries for Tyler in 2020 related to the modified service contract, assuming a prospective approach.
c. Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation
Business
1 answer:
faust18 [17]3 years ago
7 0

Answer: See explanation

Explanation:

a. 1 jan 2020

Debit Cash $10,900

Credit Unearned revenue $10,900

31st dec 2020

Debit Unearned revenue $10,900

Credit Service revenue $10,900

1 jan 2020

Debit Cash $10,900

Credit Unearned revenue $10,900

31st dec 2020

Debit Unearned revenue $10,900

Credit Service revenue $10,900

b. 1 Jan 2021

Debit Cash $30500

Credit Unearned revenue $30500

31st dec 2020

Debit Unearned revenue $7,625

Credit Service revenue $7,625 ($30500/4)

c. 1 Jan 2020

Debit Cash $30500

Credit Unearned revenue $30500

31st Dec 2020

Debit Unearned revenue $8,700

Credit Service revenue $8,700

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Answer:

E)Debit Supplies Expense $850 and credit Supplies $850.

Explanation:

The inventory/supplies balance at the end of the period in which a count was conducted has to be adjusted to reflect the amount of stock/supplies available at the end of the period.

Given that the count indicates that there are $1,250 of supplies on hand and the book balance is $2,100,

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3 years ago
What is economy? economic basics study question 2
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The study that tells about the production, usage and distribution of goods and services among the people of the nation is called the economy.

<h3>What is production?</h3>

Production is the process of making finished goods by converting them from its raw materials.

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​Haley is an accountant for a large hospital network. She knows that she could easily "skim" money from the organization to keep
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