Question

Junktrader is an online company that specializes in matching buyers and sellers of used items. Buyers and sellers can purchase a membership with Junktrader, which provides them advance notice of potentially attractive offers. a. Junktrader provided online advertising services for another company for $325 on account. b. On the last day of the month, Junktrader paid $120 cash to run an ad promoting the company's services. The ad ran that day in the local newspaper. C. Received $215 cash in membership fees for the month from new members. d. Received an electricity bill for $96 for usage this month. The bill will be paid next month. e. Billed a customer $374 for helping sell some junk. Junktrader expects to receive the customer's payment by the end of next month. Required: 1. Prepare journal entries for the above transactions, which occurred during a recent month. 2. Determine Junktrader's preliminary net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries for the above transactions, which occurred during a recent month. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 > Junktrader provided online advertising services for another company for $325 on account. Record the transaction. Note: Enter debits before credits. Transaction General Journal Debit Credit a.

Answer 1

$325 $120 Answer is as follows: 1. Jounal entries: (2) Accounts receivable as Dr $325 To Service Revenue afe (b) Advertising empenses afc-D7 $120 To Cashar (c) Cashafer To membership fee afe (d) Electricity billac-D $96 To Electricity bill payable of $96 Ce) Accounts receivable ale --DY $374 To Service revenue ale 8374 $215 $215

(a). Preliminary net income: Particulars Amount Service revenue (3257374) $699 Membership fee $215 () Advertising expense ($120) 5) Electricity bill (896) Net income $698