9.Ben teaches golf lessons at a country club under a business called Ben’s Pure Swings (BPS). He operates this business as a sole proprietorship on the accrual basis of accounting. This year BPS billed clients for $86,700 and collected $61,000 in cash for golf lessons completed during the year. In addition, BPS collected an additional $14,500 in cash for lessons that will commence after year end. Ben hopes to collect about half of the outstanding billings next year but the rest will likely be written off.
Besides providing private golf lessons, BPS also contracted with the country club to staff the driving range. This year BPS billed the country club $27,200 for the service. The club paid $18,000 of the amount but disputed the remainder. By year end the dispute had not been resolved, and while Ben believes he is entitled to the money, he has still not collected the remaining $9,200.
What is the amount of revenue recognized by BPS? (Excel spreadsheet template provided)
As per revenue recognition
Amount of revenue by BPS Is as follows
Bill collected =$61000
Money collected in advance for next year ( as money if accrued will be recorded not necessarily received)= $14500
Amount left after bad debt is ($86700-61000=25700
where 50% is bad debt so (25700-12850))
=$12850
For next year amount still in arrear is$ 9200 but as per revenue recognition whole $27200 will be considered revenue
So total revenue is =
$61000+$27200+$14500+$12850=$115550
9.Ben teaches golf lessons at a country club under a business called Ben’s Pure Swings (BPS)....
Ben teaches golf lessons at a country club under a business called Ben's Pure Swings (BPS). He operates this business as a sole proprietorship on the accrual basis of accounting. This year BPS billed clients for $96,700 and collected $61,000 in cash for golf lessons completed during the year. In addition, BPS collected an additional $14,500 in cash for lessons that will commence after year end. Ben hopes to collect about half of the outstanding billings next year but the...
Question 3 O out of 2 points Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $1,400 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,000. During the year, he drove his car a total of 12,000 miles (combination of business and personal travel). Ryan can provide written documentation of the business purpose for trips totaling 3,000 miles. If...