Question

1)

During 2018, the following events occurred for Parker Company Parker receives $39,600 cash in advance from Westberry Company for consulting services to be performed over a one-year period beginning April 1, 2018. Provided $52,400 of consulting services on account. Collected $14,700 cash from customers in partial settlement of its accounts receivable. Parker recognizes the portion of the unearned revenue it earned during the accounting period. After recording all these transactions, Parker’s total revenue will be $______

2)

During 2018, the following events occurred for Parker Company Parker receives $18,000 cash in advance from Westberry Company for consulting services to be performed over a one-year period beginning March 1, 2018. Provided $58,500 of consulting services on account. Collected $19,400 cash from customers in partial settlement of its accounts receivable. Parker recognizes the portion of the deferred revenue it earned during the accounting period. After recording all these transactions, Parker’s balance in Accounts Receivable will be $______

3)

Karev Company started Year 2 with a $400 balance in its Cash account, a $600 balance in its Supplies account and a $1,000 balance in its common stock account. During Year 2 the company experienced the following events.

(1) Paid $237 cash to purchase supplies

(2) Physical count revealed $262 of supplies on hand at the end of Year 2

Based on this information the amount of supplies expense reported on the Year 2 income statement is $_______________

4)

During 2018, the following events occurred for Clouseau Consultants Clouseau provided $46,939 of consulting services to its clients but no cash has been collected. Clouseau collected $27,985 cash from customers in partial settlement of its accounts receivable. Clouseau paid the instructor $14,447 cash for teaching training courses (salary expense). Clouseau paid $4,800 for supplies. Half of the supplies were used in 2018. Clouseau paid $3,331 in dividends. After recording all these transactions, Clouseau’s net income will be $_________

5)

On May 1 of Year 1 Mills Enterprises paid $3,780 cash for an insurance policy that would provide protection for a one year term. The company’s fiscal closing date is December 31. Based on this information, the amount of  prepaid insurance appearing on the Year 1 Balance Sheet would be $___________

Answer 1

Parker Company Total revenue 82,100 Cash 39,600 + No. 1 2 3 Assets Liabilties Stockholders Equity Accounts Receivable = Unearned Revenue + Common Stock + Retained Earnings Calculation 39,600 + 52,400 52,400 (14,700) = (29,700) + 29,700 =39,600/12*9 months 37,700 = 9,900 + 82,100 April to Dec - 9 months + 14,700 + + Totals 54,300 +

Parker Company Accounts Receivable 39,100 Cash 18,000 + No. 1 2 3 Assets Liabilties Stockholders Equity Accounts Receivable = Unearned Revenue + Common Stock + Retained Earnings Calculation 18,000 + 58,500 58,500 (19,400) = (15,000) + 15,000 =18,000/12*10 months 39,100 = 3,000 + 73,500 March to Dec - 10 months + 19,400 + + Totals 37,400 +

Karev Company Supplies expense 575 Supplies Account Opening balance Purchases Ending balance Supplies expense 600 237 (262) 575

Clouseau Consultants Net Income 30,092 Income Stmt heads Assets Accounts Receivable 46,939 (27,985) = Liabilties + Stockholders Equity = Accounts + Common + Retained Earnings Supplies - Payable + Stock + Revenues + Expenses = Net Income - Dividends 46,939 + 46,939 Cash + Service Revenue + + + + 27,985 (14,447) (4,800) (3,331) 5,407 14,447 2,400 = (14,447) - (2,400) - 4 2,400 + + Salary expense Supplies expense (3,331) Dividends (3,331) + + Totals 18,954 2,400 = + + 46,939 + 16,847 = 30,092 -

Mills Enterprises Prepaid insurance 1,260 Prepaid insurance Opening Balance Insurance expense Ending Balance Calculation 3,780 (2,520) =3,780/12*8 months 1,260 May to Dec - 8 months