Question

Here are 5 simple problems, please show the work/formulas to solve each of them. Thank you.

The following transactions are July activities of Emma's Tik Tok Service, which creates videos. • Emma's collected $4,292 from credit customers for services related to videos created in June. • Emma's billed a customer for $820 for a video made on the last day of July. The bill is to be paid in August. • On July 1, a customer gave Emma's advance payments totaling $2,900 for the five months of work to be done equally staring in July • Emma's received $606 from video created for customers in July. What is the revenue Emma will recognize in July?

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2. Eilish Company had the following account balances.

Accounts Payable $ 679
Accounts Receivable $ 1,955
Cash $ 3,061
Common Stock $ 1,937
Deferred Revenue $ 1,351

Eilish was missing the account balance for retained earnings. What is Eilish's balance in retained earnings?

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4. The following transactions are July activities of Evan’s Tik Tok Service, which creates videos.

• Evan collected $1,780 from customers for services related to videos created in July.        
• Evan billed a customer for $999 for a video made on the last day of July. The bill is to be paid in August.
• On July 1, a customer gave Evan advance payments totaling $3,365 for the four months of work to be done equally staring in July
• Evan received $728 from credit sales made to customers last month (in June).

By what amount did total cash increase during July?

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5. During its first month of operations, Ava Corporation provided $90,460 of services to their customers. Ava’s costs included rent of $14,945 and salaries and wages totaling $18,665. At the end of the month, the board of directors approved a dividend of $2,212. What is the total amount of expenses incurred by Ava Company during the month?

Answer 1

1. What is the revenue Emma will recognise in July ?

A. Revenue from Operations in July = $820+$580+$606 = $2,006

Notes:

a. Emma's collectd $4,292 from credit customers for services rendered in june. This is the service provided in June but received in July. Therefore, revenue to be recognised in June on accrual basis.

b. Emma's billed a customer for $820 for a video made on the last day of July. Therefore, revenue to be recognised in July on accrual basis.

c. A customer gave advance of $2,900 for 5 months for the work to be done equallu starting in july. Therefore the revenue to recognised in July on accrual basis is $2,900/5 = $580.

d. Emma's received $606 from video created for customers in July. Therefore, this is to be recognised in July only.

2.Eilish was missing the account balance for retained earnings. What is Eilish's balance in retained earnings?

Assets	Amount ($)
Accounts Receivable	1,955
Cash	3,061
Total Assets	5,016
Liabilities
Accounts Payable	679
Deferred Revenue	1,351
Common Stock	1,937
Retained Earnings (b/f)	1,049
Total Equity & Liabilities	5,016

Retained Earnings = Total Assets - Accounts Payable - Deferred Revenue - Common Stock

= $5,016 - $679 - $1,351 - $1,937

=$1,049

3. What is the change in the total liabilities in July?

Total Increase = $652 (forJuly Month electricity bill to be paid in August)

Total Decrease = $472 +$341 (June Electricity Bill paid + Wages for June Paid) = $813

Net Decrease = $161

The change in total liabilities = -$161

4. What is the total increase in Cash Balance ?

Total Increase in Cash:

a.Amount collected from customers for services related to videos created in July. = $1,780

b.a customer gave Evan advance payments for work to be done equally staring in July = $3,365

c.Evan received from credit sales made to customers last month (in June). = $728

Total Increase = $5,873

5. What is the total amount of expenses incurred by Ava Company during the month?

The total Expenses to be recognised = $14,945 + $18,665 = $33,610

Note: Dividend delared is not an expense and should not be recognised as an expense.