Question

The following data are taken from the comparative statement of financial position of Newman Billiards Club Ltd, which prepares its financial statements using the accrual basis of accounting. December 31 2020 2019 Accounts receivable from members £13,600 £9,900 Unearned service revenue 16,300 25,700 Members are billed based upon their use of the club's facilities. Unearned service revenues arise from the sale of gift certificates, which members can apply to their future use of club facilities. The 2020 income statement for the club showed that service revenue of £164,000 was recorded during the year. Your answer is partially correct. Prepare Journal entries for each of the following events that took place during 2020. (Hint: You will probably find it helpful to use T-accounts to analyze these data.) (1) Accounts receivable from 2019 were all collected. (2) Gift certificates outstanding at the end of 2019 were all redeemed. (3) (a) An additional $40,000 worth of gift certificates were sold during 2020. (b) A portion of these was used by the recipients during the year; the remainder was still outstanding at the end of 2020. (4) Services performed for 2020 were billed to members. (5) Accounts receivable for 2020 (i.e, those billed in item [4] above) were partially collected. (Credit account tities are automatically Indented when the amount is entered. Do not indent manually Debit Credit No. Account Titles and Explanation 1. Cash 9900 | Accounts Receivable 9900 2. Unearned Service Revenue 25700 Service Revenue 25700 3(a) Cash 40000 40000 23700 Unearned Service Revenue 3(b) Unearned Service Revenue Service Revenue 4 Accounts Receivable Service Revenue 5. Cash Accounts Receivable

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer No. Debit Credit 1 9900 9900 2 25700 25700 40000 Account Title and Explanation Cash Account Receivable Unearned service revenue Service revenue Cash Unearned Service Revenue Unearned service revenue Service revenue Account Receivable Service Revenue Cash Account Receivable 40000 3 (b) 23700) 23700 4 114600 114600 5 101000 101000

Working Note account Receivable Beginning Balance 9900 Cash Service Revenue (164000-25700-23700) 114600 Cash (balancing figure) 9900 101000 Ending balance 13600 Total 124500 Total 124500 Service Revenue Service revenue ( 40000-16300) Unearned Service Revenue 25700 Beginning Balance 23700 Cash 25700 40000 Enging balance 16300 Total 65700 Total 65700 For any help please comment in the comment box.