Allen Company received $12,000 cash from Gerry Corporation for cleaning services that Allen agrees to perform over a one year period beginning on June 1, Year 1. Howwould the adjustment on December 31, Year 1 to recognize the portion of the revenue that Allen earned during Year 1 affect Allen company's financial statements?A.B.C.D.Assets = Liabilities +n/a(7,000)n/a(7,000)12,000n/aMultiple ChoiceOption DOption AOption CBalance SheetOption B12,000(6,000)Stockholders'Equity7,0007,000n/a6,000Revenue7,000n/a12,0006,000Income StatementExpensen/an/an/an/a= Net Income7,000n/a12,0006,000Statement ofCash Flowsn/an/a12,000OperatingActivityn/a

Date Particulars Debit Amount Credit Amount June 1, Year 1 Bank A/c ......................Dr…

Allen Company received $12,000 cash from Gerry Corporation for cleaning services that Allen agrees to perform over a one year period beginning on June 1, Year 1. How would the adjustment on December 31, Year 1 to recognize the portion of the revenue that Allen earned during Year 1 affect Allen company's financial statements? Balance Sheet A. B. Assets = Liabilities + n/a (7,000) n/a (7,000) C. 12,000 D. n/a 12,000 (6,000) Stockholders' Equity 7,000 7,000 n/a 6,000 Revenue 7,000 n/a 12,000 6,000 Income Statement Expense = Net Income n/a n/a n/a n/a 7,000 n/a 12,000 6,000 Statement of Cash Flows n/a n/a 12,000 Operating Activity n/a

Allen Company received $12,000 cash from Gerry Corporation for cleaning services that Allen agrees to perform over a one year period beginning on June 1, Year 1. How would the adjustment on December 31, Year 1 to recognize the portion of the revenue that Allen earned during Year 1 affect Allen company's financial statements? Balance Sheet A. B. Assets = Liabilities + n/a (7,000) n/a (7,000) C. 12,000 D. n/a 12,000 (6,000) Stockholders' Equity 7,000 7,000 n/a 6,000 Revenue 7,000 n/a 12,000 6,000 Income Statement Expense = Net Income n/a n/a n/a n/a 7,000 n/a 12,000 6,000 Statement of Cash Flows n/a n/a 12,000 Operating Activity n/a

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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