ORIE_3150_Homework__2_Answers_Spring_2009

ORIE_3150_Homework__2_Answers_Spring_2009 - ORIE 3150...

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ORIE 3150 Spring 2009 Homework #2 Answers 1. The following are selected data taken from the financial statements of the Breakers Billiards Club in Stockton, California. The club uses the accrual method of accounting. Dues are billed to the members on an annual basis. The club also sells gift certificates for cash. The gift certificates are recorded as revenue when they are redeemed, not when they are sold. The club uses a single revenue account to record all revenues. Dec. 31, 2005 Dec. 31, 2004 Accounts Receivable $12,000 $9,000 Unearned Revenue $17,000 $22,000 Revenue $153,000 $133,000 Show journal entries for the net effect of the following events that took place during fiscal year 2005. a. All outstanding dues at the end of 2004 were collected from members. [date] Cash 9,000 Accounts Receivable 9,000 b. All gift certificates outstanding at the end of 2004 were redeemed in 2005. [date] Unearned Revenue 22,000 Revenue 22,000 c. $30,000 in gift certificates were sold in 2005. Some, but not all of them were redeemed. [date] Cash 30,000 Revenue 13,000 Unearned Revenue 17,000 d. Dues for fiscal 2005 were all billed to members. Some, but not all of the members paid their dues in 2005. [date] Cash 106,000 Accounts Receivable 12,000 Revenue 118,000 Beg. Bal. 9,000 9,000 (a) (b) 22,000 22,000 Beg. Bal. 0 Beg. Bal. (d) 12,000 17,000 ( c) 22,000 (b) 13,000 ( c) 118,000 (d) End Bal. 12,000 17,000 End Bal. 153,000 Bal. prior to closing Accounts Receivable (A) Unearned Revenue (L Revenue (tSE)
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2. P & H Company has the following account balances following adjustments, and now needs to close all of the nominal accounts at the end of the accounting fiscal year on December 31, 2006. Cash
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ORIE_3150_Homework__2_Answers_Spring_2009 - ORIE 3150...

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