Listed below are selected transactions of Ben’s HomeGoods Store for the current year ending December 31, 2022. a) During December, credit card sales totaled $675,000, which includes the 8% sales tax that must be remitted to the state by the fifteenth day of the following month. (At time of sale, the total amount is recorded in Sales.) b) On December 1, the store received $5,000 from the local community theater for the rental of certain furniture to be used in a stage production during December and January. The furniture will be returned on February 1. c) On December 31 the store was notified it will be required to restore the area (considered a land improvement) surrounding one of its parking lots, when the store moves in 5 years. Ben determined it will cost $78,000 in 2027. Ben estimates the fair value of the asset retirement obligation on December 31, 2022 is $61,500. Prepare the necessary journal entries necessary to record the above transactions as they occurred and any adjusting entries relative to the transactions that would be required on December 31, 2022
Listed below are selected transactions of Ben’s HomeGoods Store for the current year ending December 31,
2022.
a) During December, credit card sales totaled $675,000, which includes the 8% sales tax that must be
remitted to the state by the fifteenth day of the following month. (At time of sale, the total amount is
recorded in Sales.)
b) On December 1, the store received $5,000 from the local community theater for the rental of certain
furniture to be used in a stage production during December and January. The furniture will be returned
on February 1.
c) On December 31 the store was notified it will be required to restore the area (considered a land
improvement) surrounding one of its parking lots, when the store moves in 5 years. Ben determined it
will cost $78,000 in 2027. Ben estimates the fair value of the asset retirement obligation on December
31, 2022 is $61,500.
Prepare the necessary
The amount of revenue which is received in cash for deferred period in which services will be performed or products will delivered is credited to "Unearned Revenue". It is because the amount received is a liability which will be returned in case of non-performance of committed business activity.
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