Applying the revenue principle [10-20 min]
Crum’s Cookies uses the accrual method of accounting and properly records transactions on the date they occur. Descriptions of customer transactions follow:
a. | Received $3,000 cash from customer for six months of service beginning April 1, 2012. |
b. | Catered event for customer on April 28. Customer paid Crum’s invoice of $600 on May 10. |
c. | Scheduled catering event to be held June 3. Customer paid Crum’s a $500 deposit on May 25. |
d. | Catered customer’s wedding on May 3. Customer paid Crum’s an $800 deposit on April 15 and the balance due of $1,000 on May 3. |
e. | The company provided catering to a local church’s annual celebration service on May 15. The church paid the $800 fee to Crum’s on the same day. |
f. | The company provides food to the local homeless shelter two Saturdays each month. The cost of each event to the shelter is $280. The shelter paid Crum $1,120 on May 25 for April and May’s events. |
g. | On April 1, Crum’s entered into an annual service contract with an oil company to cater the customer’s monthly staff events. The contract’s total amount was $4,000, but Crum’s offered a 2.5% discount since the customer paid the entire year in advance at the signing of the contract. The first event was held in April. |
h. | Crum’s signed contract for $1,000 on May 5 to cater X-treme sports events to be held June 15, June 27, October 1, and November 15. |
Requirement
1. Calculate the amount of revenue earned during May, 2012 for Crum’s Cookies for each transaction.
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