Provide answer Total Spa Services earned $150,000 of service revenue during 2021. Of the$150,000 earned, the business received $135,000 in cash. The remainingamount, $15,000, was still owed by customers as of December 31. In addition,Total Spa Services incurred $78,000 of expenses during the year. As ofDecember 31, $6,000 of the expenses still needed to be paid. In addition, TotalSpa Services prepaid $9,000 cash in December 2021 for expenses incurredduring the next year.A) Determine the amount of service revenue and expenses for 2021 usinga cash-basis accounting system.B) Determine the amount of service revenue and expenses for 2021 usingan accrual-basis accounting system.

Step 1: Introduction to the Revenue and ExpensesRevenue refers to the amount received or earned from…

Answered: Total Spa Services earned $150,000 of…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 33P

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Salman Construction Co. began work on a $3,125,000 contract in 2018, using the percentage-of-completion method of accounting. The following information is given: 2018 Costs incurred during the year Estimated costs to complete as of Dec. 31 Billings during the year Cash collections during the year $1,500,000 1,000,000 1,375,000 812,500 What amount of gross profit should be recognized in 2018?
Arrow Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Arrow's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $400,000. During 2021, Arrow sold merchandise on account for $12,000,000. Also during the year, customers returned $520,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year. The amount to adjust the refund liability to its appropriate balance at year-end would be:A. 180,000B. 220,000C. 200,000D. 240,000
Described below are certain transactions of Pharoah Company for 2021: On May 10, the company purchased goods from Fox Company for $74,900, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 1. On June 1, the company purchased equipment for $96,000 from Rao Company, paying $31,200 in cash and giving a one- year, 9% note for the balance. 2. On September 30, the company discounted at 11% its $220,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $198,000. 3.
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax’s sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $300,000. During 2021, Halifax sold merchandise on account for $11,500,000. Halifax's merchandise costs is 65% of merchandise selling price. Also during the year, customers returned $450,000 in sales for credit, with $250,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 4% of sales, are recorded as an adjusting entry at the end of the year.Required:1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.2. What is the amount of…
Vega Company expects to pay a 4% bonus on net income after deducting the bonus. Assume the company reports net income of $130,000 before the calculation of the bonus. The journal entry to record the accrued bonus includes a debit to Employee Bonus Payable, $5,000. a debit to Employee Bonus Expense, $5,200. a credit to Employee Bonus Payable, $5,000. a credit to Cash, $5,200.
On March 1, 2021, Special Company paid P500,000 for the calendar year'sproperty taxes. Advertising costs of P1,000,000 and paid P300,000 inunanticipated ordinary repairs to machinery were also incurred on March 31, 2021. What total amount of these expenses should be reported in the quarterly income statement ending June 30, 2021?
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $340,000. During 2021, Halifax sold merchandise on account for $11,600,000. Halifax's merchandise costs it 75% of merchandise selling price. Also during the year, customers returned $575,000 in sales for credit, with $319,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 5% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2021 of merchandise that was sold prior to 2021; (b) record actual returns in 2021 of merchandise that was sold during 2021; and (c) adjust the refund liability to its appropriate balance at year end.2. What is the amount…
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $390,000. During 2021, Halifax sold merchandise on account for $12,400,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $368,000 in sales for credit, with $203,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year. Required: 2. What is the amount of the year-end refund liability after the adjusting entry is recorded?
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $390,000. During 2021, Halifax sold merchandise on account for $12,400,000. Halifax's merchandise costs it 65% of merchandise selling price. Also during the year, customers returned $368,000 in sales for credit, with $203,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year. a) Record the year-end adjusting entry for estimated returns. b) Record the adjusting entry for the estimated return of merchandise to inventory. c) What is the amount of the year-end refund liability after the adjusting entry is recorded?
Berlin Corp. reported the following data for 2021: Total net sales made to customers were P2,000,000 in cash. Goods purchased for sale totalled P1,200,000 in cash. Beginning and ending inventory of goods for sale, respectively, were P200,000 and P300,000. 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 total interest income from customers promissory note earned P30,000 of this was collected. Unrealized foreign exchange gains from foreign currency receivable totaled P60,000. Using cash basis, compute the total income subject to income tax. P990,000 P750,000 P960,000 P690,000 ADD EXPLANATION THANKS
Pepper, Inc. had the following receivable financing transactions in 2021:a) At the beginning of November, Pepper, Inc. assigned P2,000,000 out of its P10,000,000 outstanding accounts receivables to Metrobank in consideration of a P1,500,000, 12% loan. Metrobank charged the company 5% of the loan principal as service charge. By the end of November, Pepper collected P600,000 cash from the assigned accounts net of a P50,000 sales discount. Also, by the end of November, Pepper accepted from customers merchandise originally invoiced at P60,000 as returns.By the end of December, Pepper collected another P700,000 from the assigned accounts after P40,000 sales discount. The company wrote-off P80,000 of the assigned accounts as worthless.The agreement with Metrobank calls for monthly remittance of customer collections for the month. The collections will cover both interest and loan principal.b) Also, at the beginning of November, Pepper, Inc. factored another P500,000 of its accounts…
On January 8, the end of the first weekly pay perlod of the year, Regis Company's employees earned $21,760 of office salarles and $70,840 of sales salarles. Withholdings from the employees' salarles Include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $13,560 of federal Income taxes, $1,400 of medical Insurance deductions, and $880 of union dues. No employee eamed more than $7,000 in this first period. Required: 1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis's state unemployment tax rate is 5.4% of the first $7,000 pald to each employee. The federal unemployment tax rate is 0.6% 1.2 Prepare the journal entry to record Regis Company's January 8 employee payroll expenses and liabilitles. 2 Prepare the Journal entry to record Regis's employer payroll taxes resulting from the January 8 payroll. Regis's state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax…

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