Applying the revenue principle [10-20 min]
Nibble’s Cookies uses the accrual method of accounting and properly records transactions on the date they occur. Descriptions of customer transactions follows:
a. | Received $4,800 cash from customer for six months of service beginning January 1, 2012. |
b. | Catered event for customer on January 28. Customer paid Nibble’s invoice of $800 on February 10. |
c. | Scheduled catering event to be held June 3. Customer paid Nibble’s a $750 deposit on February 25. |
d. | Catered customer’s wedding on February 3. Customer paid Nibble’s a $600 deposit on January 15 and the balance due of $1,500 on February 3. |
e. | The company provided catering to a local church’s annual celebration service on February 15. The church paid the $900 fee to Nibble’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 $260. The shelter paid Nibble’s $1,040 on February 25 for January and February’s events. |
g. | On December 1, 2011, Nibble’s entered into an annual service contract with an oil company to cater the customer’s monthly staff events. The contract total amount was $8,000, but Nibble’s offered a 1% discount since the customer paid the entire year in advance at the signing of the contract. The first event was held in December of last year. |
h. | Nibble’s signed contract for $1,600 on February 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 February, 2012 for Nibble’s Cookies for each transaction.
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