In an effort to raise revenue the state has imposed a

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Unformatted text preview: ) Prepare an analysis to determine the correct amount of revenue for purposes of computing the tax. b) Prepare journal entries for the “revenue” cycle, as well as the other cash items described. c) Prepare a general ledger account supporting the revenue calculation. Worksheet 8 (a) a) Gross receipts as reported $ 3,720,000 Fact 1: Remove stockholder investments (450,000) Fact 2: Fact 3: Fact 4: Fact 5: Fact 6: Fact 7: Fact 8: Fact 8: Corrected gross receipts Please click the advert Budget-Friendly. Knowledge-Rich. The Agilent InfiniiVision X-Series and 1000 Series offer affordable oscilloscopes for your labs. Plus resources such as lab guides, experiments, and more, to help enrich your curriculum and make your job easier. Scan for free Agilent iPhone Apps or visit qrs.ly/po2Opli See what Agilent can do for you. www.agilent.com/find/EducationKit © Agilent Technologies, Inc. 2012 u.s. 1-800-829-4444 canada: 1-877-894-4414 Download free eBooks at bookboon.com 51 Accounting Cycle Exercises II Problem 8: Worksheet b) GENERAL JOURNAL Date Fact 1 Accounts Debit Cash Credit 450,000 Capital Stock 450,000 Record stockholder investment Download free eBooks at bookboon.com 52 Accounting Cycle Exercises II Problem 8: Worksheet Worksheet 8 (c) REVENUES Date Description Debit Balance - - - - - - - - - - - - Please click the advert Balance forward Credit Download free eBooks at bookboon.com 53 Accounting Cycle Exercises II Problem 8: Solution Solution 8 (a) a) The following schedule reveals the corrected revenue calculations. Mont Blanc owes an additional $2,508 in gross receipts tax (($3,970,800 - $3,720,000) X 1%). Gross receipts as reported $ 3,720,000 Fact 1: Remove stockholder investments (450,000) Fact 2: Remove interest income (75,000) Fact 3: Remove deposit error (2,700) Fact 4: Add cash revenues never deposited 74,100 Fact 5: Remove refund included in revenues (3,600) Fact 6: Remove tax refund deposit (42,000) Fact 7: Remove customer deposit refunded (30,000) Fact 8: Subtract collections of beginning receivables (390,000) Fact 8: Add services provided on account not yet collected Corrected gross receipts 1,170,000 $ 3,970,800 b) GENERAL JOURNAL Date Fact 1 Accounts Debit Cash Credit 450,000 Capital Stock 450,000 Record stockholder investment Fact 2 Cash 75,000 Interest Revenue 75,000 Record interest earnings Fact 3 No entry Bank error only Download free eBooks at bookboon.com 54 Accounting Cycle Exercises II Fact 4 Problem 8: Solution Cash 74,100 Revenues 74,100 Record service provided for cash Fact 5 Cash 36,000 Supplies Expense 36,000 Reduce supplies for refund Fact 6 Cash 42,000 Tax Expense 42,000 Reduce taxes for refund Fact 7 No net adjustment needed Fact 8 Cash 390,000 Accounts Receivable 390,000 Record collection of receivables Fact 8 Accounts Receivable 1,170,000 Revenues 1,170,000 Services provided on account Balance Cash 2,726,700 Revenues 2,726,700 All other revenues ($3,970,800 - $74,100 - $1,170,000 = $2,726,700) Solution 8 (c) REVENUES Date Description Debit Credit Balance Balance forward - Fact 4 - 74,100 74,100 Fact 8 - 1,170,000 1,244,100 Balance - 2,726,700 3,970,800 55 - -...
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