Answer:
The adjusted balance in Deferred Revenue at the end of year 1 is $1,080,000.
Explanation:
Deferred revenue is also known as unearned revenue which means that income is received but not earned. In accrual basis accounting, we record revenues only after we deliver the goods or perform the services.
In this case, the $1,800,000 is received for 10 home games which means that per game we received 1,800,000/10 = 180,000.
Since only 4 games were played during the year, the revenue earned at the end of year 1 is: 180,000*4= 720,000
The remaining 6 games will be played in year 2 but we have already received the payment of games, so it will be considered as a Deferred Revenue. The amount of Deferred Revenue at the end of year 1 is:
⇒ 180,000*6 = 1,080,000
Answer:
Reduce the Cash Book Balance by $45
Explanation:
The Cash Book Balance will be $45 too much (overstated) and should be reduced. Thus, this error be treated on the bank reconciliation by reducing the Cash Book Balance by $45.
Answer:
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