a) Prepare a worksheet showing the October transactions and the October accrual adjustments for the BCE Company. b) Prepare BCE Company’s income statement and retained earnings statement for October, and its balance sheet (showing current and non-current assets) on October 31st . c) Answer the following questions:What would the October’s earnings of the company be, if the portion of unearned revenues recognized in October were £600 rather than £900?What would be the implications for November’s earnings if the portion of unearned revenues recognized in October were £600 rather than £900?Do you have reasons to suspect that the revenue may currently have been recognized prematurely? BCE is a software company which over the past two years has been reportinglosses. The CEO of BCE commits that in October 2017, the company will enter astage of stable growth and the shareholders will start to see again returns on theirinvestment.On September 30th, 2017 the balance sheet of BCE Company was:Assets:Liabilities:Cash2,790Accounts Payable2,360Accounts Receivable2,910Unearned Revenue9603.320SuppliesEquipment - at costLess: Accumulated1,120Total Liabilities:10,000Equity:Share CapitalRetained EarningsTotal Equity:Depreciation(500)10,0003,00013.000Total Assets:16,320Total Liabilities and Equity:16,320During October, the following transactions occurred:|October 1stPaid £600 for a one-year insurance policy that will expire nextyear, on September 30th 2018.October 5thReceived £1,000 cash due from customers, paying outstandingamounts due for service provided in September 2017.October 20th Performed services for customers and billed them for the fees of£2,160, to be paid in December 2017.October 31stPaid salaries to employees for the month of October £2,000.October 31stReceived £750 from customers for services to be provided in thefuture.At the end of October, the BCE Company needed to make accrual adjustments tothe accounts, using the following information:• Depreciation for the month is £500.Of the unearned revenue at the beginning of the month, £900 has been earned inOctober.• An inventory count at the close of business on October 31 reveals that £620of supplies are still on hand.

Unearned Revenue is the cash received in advance for the products to be delivered in the future or…

Answered: a) Prepare a worksheet showing the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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a) Prepare a worksheet showing the October transactions and the October accrual adjustments for the BCE Company.

b) Prepare BCE Company’s income statement and retained earnings statement for October, and its balance sheet (showing current and non-current assets) on October 31st .

c) Answer the following questions:

What would the October’s earnings of the company be, if the portion of unearned revenues recognized in October were £600 rather than £900?

What would be the implications for November’s earnings if the portion of unearned revenues recognized in October were £600 rather than £900?

Do you have reasons to suspect that the revenue may currently have been recognized prematurely?

BCE is a software company which over the past two years has been reporting
losses. The CEO of BCE commits that in October 2017, the company will enter a
stage of stable growth and the shareholders will start to see again returns on their
investment.
On September 30th, 2017 the balance sheet of BCE Company was:
Assets:
Liabilities:
Cash
2,790
Accounts Payable
2,360
Accounts Receivable
2,910
Unearned Revenue
960
3.320
Supplies
Equipment - at cost
Less: Accumulated
1,120
Total Liabilities:
10,000
Equity:
Share Capital
Retained Earnings
Total Equity:
Depreciation
(500)
10,000
3,000
13.000
Total Assets:
16,320
Total Liabilities and Equity:
16,320
During October, the following transactions occurred:
|October 1st
Paid £600 for a one-year insurance policy that will expire next
year, on September 30th 2018.
October 5th
Received £1,000 cash due from customers, paying outstanding
amounts due for service provided in September 2017.
October 20th Performed services for customers and billed them for the fees of
£2,160, to be paid in December 2017.
October 31st
Paid salaries to employees for the month of October £2,000.
October 31st
Received £750 from customers for services to be provided in the
future.
At the end of October, the BCE Company needed to make accrual adjustments to
the accounts, using the following information:
• Depreciation for the month is £500.
Of the unearned revenue at the beginning of the month, £900 has been earned in
October.
• An inventory count at the close of business on October 31 reveals that £620
of supplies are still on hand.

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