Deluxe Building Services offers janitorial services on both a contract basis and an hourly basis. On January 1, Deluxe collected $42,000 in advance on a six-month contract for work to be performed evenly during the next six months. a. Provide the general journal entry on January 1 to record the receipt of $42,000 for contract work. b. Provide the adjusting entry to be made on January 31, for the contract work done during January. c. At January 31, a total of 40 hours of hourly rate janitor work was unbilled. The billing rate is $25 per hour. Provide the adjusting entry needed on January 31. ( Note: The firm uses the account Fees Receivable to reflect amounts due but not yet billed.)
Transaction Entries and
Deluxe Building Services offers janitorial services on both a contract basis and an hourly basis. On January 1, Deluxe collected $42,000 in advance on a six-month contract for work to be performed evenly during the next six months.
a. Provide the general
b. Provide the adjusting entry to be made on January 31, for the contract work done during January.
c. At January 31, a total of 40 hours of hourly rate janitor work was unbilled. The billing rate is $25 per hour. Provide the adjusting entry needed on January 31. ( Note: The firm uses the
The journal entries are prepared to keep the record of day to day transactions of the business. The adjustments are made at year end to adjust the deferrals and accruals of the current period.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
