Question

E F GH OP Assets Liabilities+Shareholder's Equi Profit & Loss Accounts Common Retained Net Cash Account 2|Entry # Cash + Receivable-Liabilities + stock + Earnings Revenue ExpensesIncomeFlovw Name e Check 4 4 10

Transaction 1.) Frost Business started operations on December 1, 2018 with an initial issue of common stock of 64,770 after you record this transaction: The check formula should return TRUE, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 2.) Frost Business performed services for one month on account for 54,000. Even though no cash was received revenue must be recorded since the revenue recognition rules have been met (it has been earned and it's reasonable to expect payment. Check formula should return true, show impact on cash flow if any, choose account name if appropriate revenue, salary, rent.

Transaction 3.) Frost Business has received 25%  of the amount recorded in transaction 2 as partial payments of the accounts receivable, after you record this transaction (check formula should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 4.) Frost Business paid 10% of the amount of the amount recorded in Transaction 2 as salary expense, after you record this transaction (check formula should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 5.) Frost Business paid 5% of the amount recorded in Transaction 2 as rent expense, after you record this transaction (check formula should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 6.) Record the payment of the cell phone bill. The amount is 1% of 54,000. Create a new expense name; after you record this transaction (check formula should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 7.) Record a cash prepayment from a second customer of 10,795. After you record this entry, a new row should be added for the transaction, the check formula should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Transaction 8.) Record an adjusting entry to recognize 25% of the prepayment from transaction 7 as revenue. After you record this transaction a new row should be added for the transaction, the check figure should return true, show impact on cash flow if any, choose an account name if appropriate revenue, salary, rent.

Answer 1

1 Answer: Liabilities+Shareholder's Equity Profit & Loss +Receivable Liabilities Common Stock Retained Ea Cash Flow 0 Financ Cash Revenue Expenses : Net Income Account Name Common Stock Revenue Accounts receivable Salar Rent Telephone Ex Unearned revenue Revenue 64,770+ 64,770+ 54,000 13,500 54,000 54,000 54,000 01 Operating 13,500 5,400 2,700 5,400 2,700 5,400 2,700 5,400 Operatin 2,700 Operating 540+ 10,795 4 10,795 | 01 Operati 02698.75+ 2698.75 48,059 2698.75 2698.75 56,699 12 Total 13 14 Working Notes 15 16 a) Entry 3 amount is equal to 25% of entry 2 amount (i.e. $54,000*25%-$13,500) 80,425 40,500 8,096+ 64,770+ 48,059 8,640 18 b) Entry 4 amount is equal to 10% of amount in entry 2 (ie, $54,000"10% $5,400) 19 20 c) Entry 5 amount is equal to 5% of amount in entry 2 (i.e. $54,000*5% = $2,700) 21 22 d) Entry 6 amount is equal to 1% of amount in entry 2 (i.e. $54,000"1%-$540) 23 24 e) Entry 8 amount is equal to 25% of amount in entry 7 (ie, $10,795"25% $2698.75)