ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Bartow Photographic Services takes wedding and graduation photographs. At December 31, theend of Bartow’s accounting period, the following information is available:a. All wedding photographs are paid for in advance, and all cash collected for them is creditedto Unearned Service Revenue. Except for a year end adjusting entry, no other entries aremade for service revenue from wedding photographs. During the year, Bartow received$42,600 for wedding photographs. At year end, $37,400 of services had been performed.The beginning-of-the-year balance of Unearned Service Revenue was zero.b. During December, Bartow photographed 225 members of the next year’s graduating class ofShaw High School. The school has asked Bartow to print one copy of a photograph of eachstudent for the school files. Bartow delivers these photographs on December 28 and will billthe school $5.00 per student in January of next year. Revenue from photographs ordered bystudents will be recorded as the orders are received…
During the year ended 30 September 20X9, H recorded the following cash transactions:
(1) A payment of an annual insurance premium of $6,000. This covered the period to 31 December 20X9.
(2) Receipt of $3,000 in respect of rent from a tenant covering the three-month period to 30 November 20X9.
What is the impact on profit and net assets of making the year-end adjustments for deferred income and prepayments at 30 September 20X9?
Profit Net assets
A. Decrease of $500 Increase of $500
B. Decrease of $1,000 Increase of $1,000
C. Decrease of $500 Decrease of $500
D. Increase of $1,000 Increase of $1,000
Chabon Corp. purchased a six-month insurance policy on December 1, 20X1 for $600 in cash. The policy period begins on December 1.
Part 1: Record the December 1 transaction as well as the year-end adjusting entry.
Part 2: Answer the following questions: How much of the December 1 cash payment is still prepaid on December 31? Where should the amount still prepaid at year-end be reported on the financial statements?
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