Question

Blue Nile Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $4,200 for six months of advertising. Cash Basis Accrual Basis Cash Payment Expenses Recorded Total Expenses Recorded

Answer 1

Answer-

	Cash Basis	Accrual basis
Cash Payment	January, 1	4,200	January, 1	4,200
Expenses Recorded	January, 1	4,200	January, 31	700
			February, 28	700
			March, 31	700
			April, 30	700
			May, 31	700
			June, 31	700
Total expenses recorded		4,200		4,200
	Cash Basis	Accrual basis
Cash Payment	Dec, 31	700	Dec, 31	700
Revenue Recorded	Dec, 31	700	Dec, 31	1,800
Total revenue Recorded		700		1,800

	Cash Basis	Accrual basis
Cash Received	Mar, 31	1,600	Mar, 1	1,600
Revenue Recorded	Mar, 31	1,600	Mar, 31	200
			Apr, 30	200
			May, 31	200
			June, 30	200
			July, 31	200
			Aug, 31	200
			Sep.30	200
			Oct. 31	200
Total revenue recorded		1,600		1,600

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