I-03.06 Problem

I-03.06 Problem - Scenario 2 $20,000 of unearned revenue...

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I-03.06 Examine each of the following fact scenarios, then prepare initial and end-of-year adjusting entries (when needed) assuming (a) use of a "balance sheet" approach versus (b) use of an "income statement" approach. You may assume a calendar year end for each scenario. Use T-accounts to show how the same financial statement results occur under either approach. The preprinted worksheet includes an illustrative solution for the first scenario. Scenario 1 A $1,500, one-year insurance policy was purchased on June 1, 20X1.
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Unformatted text preview: Scenario 2 $20,000 of unearned revenue was collected on August 1, 20X1. 40% of this amount was earned by the end of the year. Scenario 3 On December 1, 20X1, $3,000 was prepaid for space in a trade-show booth. The trade show is in February of 20X2. Scenario 4 A $1,000 customer deposit for future services was received on April 1, 20X1. On June 20, 20X1, the customer canceled the agreement and received a full refund....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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