Question

Question 1:

The following transactions are July activities of Noah’s Tik Tok Service, which creates videos.

1. Noah paid $982 to plumbers for repairing a broken pipe in the restrooms.
2. Noah paid $801 for the June electricity bill and received the July bill for $624, which will be paid in August.
3. Noah paid 705 to employees for work in June.

What are the total expenses Noah will recognize in July?

Question 2:

The following transactions are July activities of Emma’s Tik Tok Service, which creates videos.

• Emma’s collected $8,244 from credit customers for services related to videos created in June.        
• Emma’s billed a customer for $666 for a video made on the last day of July. The bill is to be paid in August.                               
• On July 1, a customer gave Emma’s advance payments totaling $3,520 for the five months of work to be done equally staring in July
• Emma’s received $333 from video created for customers in July.

What is the revenue Emma will recognize in July?

Question 3:

During its first month of operations, Ava Corporation provided $63,333 of services to their customers. Ava’s costs included rent of $22,595 and salaries and wages totaling $20,300. At the end of the month, the board of directors approved a dividend of $1,518. What is the total amount of expenses incurred by Ava Company during the month?

Answer 1

1. total expenses to be recoginsed in July:

repairs for broken pipe	$982
july electricity bill	624
july expenses to be recognised	$1,606

2.

total revenues to be recognised in july:

billed a customer for last day	$666
july portion of advance payment ($3,520/5 months)	704
receipts for videos created in July	333
total revenues to be recognised in july	$1,703

3.

total expenses incurred by Ava:

rent	22,595
salaries and wages	20,300
total amount of expenses incurred by Ava company	$42,895