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 $380 on account. b. On the last day of the month, Junktrader paid $75 cash to run an ad promoting the company's services. The ad ran that day in the local newspaper c. Received $205 cash in membership fees for the month from new members. d. Received an electricity bill for $130 for usage this month. The bill will be paid next month. e. Billed a customer $216 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

Answer 1

credit No. Transactions General Journal Accounts Receivable Service Revenue (to record services provided) Debit $380 $380 b. Advertising Expense (to Necond cash paid for advertising $75 Cash $75 3 Cash $205 $205 Membership Revenue (to record membership fees received) utilities Expense $ 130 Accounts Payable ( (Yo record utilities expenses 5 $ 130 5. Accounts Receivable Service Revenue , (to second service revenues $216 $216 رف Preliminary Net Income $596 calculation: Preliminary Net Income Revenues - Expenses $380 + $205 + $216 - $75 - $130 $596