Question

ACCT 2100 - Campbell Chapter 2-Accrual Accounting Practice Problem - Expense On May 1, 2017, ABC Company signed a contract to provide 1 year of marketing research services to Anderson Company starting on May 1. Anderson Company paid the full year's price of $12,000 in cash on May 1. Prepare the entry that Anderson Company should make on May 1" to record this event. + 12 000 1. cash 5/1/11 2. Record this event/entry in the Horizontal Financial Statement format below. Add any account titles/headings you need in the proper sections. Assets Liabilities Stockholders' Eq. St. of Cash Flows Income Statement What amount of Marketing Research Expense should Anderson show on its 2017 Income Statement 3. related to this contract? 4. Prepare the adjusting entry Anderson should make on December 31, 2017 related to this contract. 5. Record Anderson's adjusting entry in the Horizontal Financial Statement format below. St. of Cash Income Stockholders' Eq. Liabilities Assets Flows Statement Duisad R n8/19 Copyrieht 2019 by ane E Camebal

Answer 1

1	Date	Accounts Titles	Debit	Credit
	5/1/17	Prepaid Marketing Research	12,000
		Cash		12,000
2	Assets	Liabilities	Stockholders' Equity	Income Statement	Statement of Cash Flows
	12,000				Operating
	-12,000
3	Marketing Research Expense		8,000
		($12,000 x 8/12)
4	Date	Accounts Titles	Debit	Credit
	12/31/17	Marketing Research Expense	8,000
		Prepaid Marketing Research		8,000
5	Assets	Liabilities	Stockholders' Equity	Income Statement	Statement of Cash Flows
	-8,000		-8,000	-8,000	Operating