Answered: contract price of $48,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

1. Clean & Clear Water offers pool and spa cleaning services to hotels and residential customers. Commercial (hotels) customers pay on a monthly contract basis, while residential customers pay an hourly rate based on services provided. In July 2019, Clean & Clear Water signed a 6-month contract with Travel Holidays to provide pool and spa cleaning services for 3 hotel sites. The contract price of $48,000 was collected on July 1, 2019. The services will be provided evenly over the 6 months. During July 2019, Clean & Clear Water also provided 80 hours of residential pool services at $30 per hour. These services have not yet been billed to residential customers. The company uses the account, Fees Receivable, to reflect amounts due but not yet billed.

a. Prepare the entry on July 1, 2019 to record the receipt of $48,000 cash related to the contract with Travel Holidays.

b. Prepare the adjusting entry to be made on July 31, 2019 for the contract work performed for Travel Holidays during the month.

c. Prepare the adjusting entry needed on July 31, 2019 to reflect the residential pool services performed during the month.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions