Answer:
As a government this isn't unusual. Unfortunately agricultural is and minimum wage is the issue
Answer:
The company promises to deliver upgrades for two years to a customer if they purchase software that costs $100. These upgrades need to be accounted for so they will be accounted for from the $100.
The $100 will therefore be split between the cost price of the software and the 2 year upgrades.
The part of the $100 that is the cost price will be recognized by the company as revenue immediately at the date of sale.
The upgrades however, will not. This is because you can only recognize revenue for services performed and these have not been performed yet. They will therefore be classified as Deferred revenue which is a liability account showing that the company owes people performance obligations.
As the years go by and the upgrades are given, the revenue will be recognized.
Answer:
Account Receivable Bal : 2060
Service Revenue Bal : 5320
Cash Bal : 3260
Explanation:
Total Earnings are $ 5320 out of which $ 3260 have been received and $ 2060 are yet to be received. ( 5320-3260= 2060)
The given transactions include three accounts which are Accounts Receivable , Sales Revenue and Cash.
<h2><u> Accounts Receivable </u></h2><h3><u>Debit Credit</u></h3>
May 5 May 12
Sales Revenue 4010 Cash 1950
<u> Bal: 2060</u>
<u> 4010 4010 </u>
<u />
<h2><u> Service Revenue </u></h2><h3><u>Debit Credit </u></h3>
May 5 Accounts Receivable
Bal 5320 4010
<u> May 15 Cash 1310</u>
<u> 5320 </u>
<u />
<h2><u> Cash </u></h2><h3><u> Debit Credit </u></h3>
May 12 A/c Rec 1950
May 15 Service Bal : 3260
Revenue 1310
<u> </u>
<u> 3260 3260 </u>
<h3><u /></h3>