Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem E3.19E
Comparing cash and accrual basis accounting and applying the revenue recognition principle and the matching principle
Fantastic Catering completed the following selected transactions during May ii| (r_
May 1 Prepaid rent for three months, $1,800.
5 Received and paid electricity bill, $200.
9 Received cash for meals served to customers, $1,900.
14 Paid cash for kitchen equipment, $3,300.
23 Served a banquet on account, $3,600.
31 Made the
31 Accrued salary expense, $1,300.
31 Recorded
Requirements
- Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example.
| Amount of Revenue (Expense) for May | ||
| Date | Cash Basis Amount of Revenue (Expense) | Accrual Basis Amount of Revenue (Expense) |
| May 1 | $(1,800) | $0 |
- After completing the table, calculate the amount of net income or net loss for Fantastic Catering under the accrual basis and cash basis accounting systems for May.
- Considering your results from Requirement 2, which method gives the best picture of the true earnings of Fantastic Catering? Why?
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Activity 2
Directions: Compute the uncollectible account expense using the percent of accounts
receivable method.
The following information needed in the computation of uncollectible accounts expense
for March 2021 is available for Parkland Enterprises:
Sales
Cash Sales
Accounts Receivable-ending
200,000.00
50,000.00
5,000.00
Assume that the company decided that five percent (5%) of accounts receivable are
deemed uncollectible.
ournalizing Cash Receipts
Enter the following transactions in a cash receipts journal:
July 6
Daren Chesbrough made payment on account, $527.
10
Made cash sales for the week, $2,470.
14
Adam Casady made payment on account, $394.
15
Yue Zou made payment on account, $203.
17
Made cash sales for the week, $2,360.
If no entry is required, select "No entry". If an amount box does not require an entry, leave it blank or enter “0” for ‘General Credit’ column also.
Page: 1
DATE
ACCOUNT CREDITED
POST.REF.
GENERAL
ACCOUNTSRECEIVABLECREDIT
SALESCREDIT
CASHDEBIT
DEBIT
CREDIT
1
fill in the blank 3
fill in the blank 4
fill in the blank 5
fill in the blank 6
1
2
fill in the blank 9
fill in the blank 10
fill in the blank 11
fill in the blank 12
2
3
fill in the blank 15
fill in the blank 16
fill in the blank 17
fill in the blank 18
3
4
fill in the blank 21
fill in the blank 22
fill in the blank 23
fill in…
Revenue and Cash Receipts Journals
Transactions related to revenue and cash receipts completed by Augusta Inc. during the month of March 20Y8 are as follows:
Mar. 2.
Issued Invoice No. 512 to Santorini Co., $1,095.
4.
Received cash from CMI Inc., on account, for $275.
8.
Issued Invoice No. 513 to Gabriel Co., $385.
12.
Issued Invoice No. 514 to Yarnell Inc., $965.
19.
Received cash from Yarnell Inc., on account, $735.
20.
Issued Invoice No. 515 to Electronic Central Inc., $210.
28.
Received cash from Marshall Inc. for services provided, $155.
29.
Received cash from Santorini Co. for Invoice No. 512 of March 2.
31.
Received cash from McCleary Co. for services provided, $90.
Prepare a single-column revenue journal and a cash receipts journal to record these transactions. Enter the transactions in chronological order.
Question Content Area
REVENUE JOURNAL
PAGE 8
DATE
Invoice No.
Account Debited
Post. Ref.…
Chapter 3 Solutions
Horngren's Accounting (11th Edition)
Ch. 3 - Prob. 1QCCh. 3 - Get Fit Now gains a client who prepays S540 for a...Ch. 3 - The revenue recognition principle requires...Ch. 3 - Adjusting the accounts is the process of Learning...Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - Prob. 7QCCh. 3 - A equity overstated income statement: expense...Ch. 3 - A worksheet Learning Objective 6 is a journal used...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...
Ch. 3 - What is the difference between cash basis...Ch. 3 - Which method of accounting (cash or accrual basis)...Ch. 3 - Prob. 3RQCh. 3 - What is a fiscal year? Why might companies choose...Ch. 3 - Under the revenue recognition principle, when is...Ch. 3 - Under the matching principle, when are expenses...Ch. 3 - When are adjusting entries completed and what is...Ch. 3 - What are the two basic categories of adjusting...Ch. 3 - What is a deferred expense? Provide an example.Ch. 3 - What is the process of allocating the cost of a...Ch. 3 - What is a contra account?Ch. 3 - Prob. 12RQCh. 3 - What does accumulated depreciation represent?Ch. 3 - Prob. 14RQCh. 3 - What is a deferred revenue? Provide an example.Ch. 3 - What is an accrued expense? Provide an example.Ch. 3 - What is an accrued revenue? Provide an example.Ch. 3 - What are the two rules to remember about adjusting...Ch. 3 - When is an adjusted trial balance prepared, and...Ch. 3 - Prob. 20RQCh. 3 - What is a worksheet, and how is it used to help...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - Prob. S3.1SECh. 3 - Prob. S3.2SECh. 3 - Prob. S3.3SECh. 3 - Prob. S3.4SECh. 3 - S3-5 Identifying types of adjusting entries...Ch. 3 -
S3-6 Journalizing and posting adjusting entries...Ch. 3 - Prob. S3.7SECh. 3 - Prob. S3.8SECh. 3 - Prob. S3.9SECh. 3 - Prob. S3.10SECh. 3 - Prob. S3.11SECh. 3 - Journalizing an adjusting entry for accrued...Ch. 3 - Prob. S3.13SECh. 3 - Determining the effects on financial statements...Ch. 3 - Prob. S3.15SECh. 3 - Prob. S3A.16SECh. 3 - Prob. S3A.17SECh. 3 - E3-18 Comparing cash and accrual basis accounting...Ch. 3 - Comparing cash and accrual basis accounting and...Ch. 3 - Prob. E3.20ECh. 3 - Prob. E3.21ECh. 3 -
E3-22) Journalizing adjusting entries
Consider...Ch. 3 - Prob. E3.23ECh. 3 - Journalizing adjusting entries and posting to...Ch. 3 - Journalizing adjusting entries and posting to...Ch. 3 - Prob. E3.26ECh. 3 - Prob. E3.27ECh. 3 - Journalizing adjusting entries and analyzing their...Ch. 3 - Prob. E3.29ECh. 3 - Prob. E3.30ECh. 3 - Prob. E3A.31ECh. 3 - Prob. E3A.32ECh. 3 - Prob. P3.33APGACh. 3 - Prob. P3.34APGACh. 3 - Prob. P3.35APGACh. 3 - Prob. P3.36APGACh. 3 - Prob. P3.37APGACh. 3 - Prob. P3A.38APGACh. 3 - Prob. P3.39BPGBCh. 3 - Prob. P3.40BPGBCh. 3 - Prob. P3.41BPGBCh. 3 - Prob. P3.42BPGBCh. 3 - Prob. P3.43BPGBCh. 3 - Understanding the alternative treatment of prepaid...Ch. 3 - Prob. P3.45CPCh. 3 - Prob. P3.46PSCh. 3 - One year ago, Tyler Stasney founded Swift...Ch. 3 - Prob. 3.1EICh. 3 - Prob. 3.1FCCh. 3 - Prob. 3.1FSC
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