In December 2020, Quebecor Printing received magazine subscriptions for 2021 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?
a. Debit cash, $500, credit subscription revenue, $500
b. Debit subscription revenue, $200, credit cash, $200
d. Debit cash, $500, credit deferred revenue, $500 Dani wants to visit the ruins at Pompeii in two
years with her brother. Currently, she has saved
$7,800, but she expects the trip for her and her
brother to cost $9,000. If she puts the $7,800 in
an account earning 7% compounded annually,
will she have enough money in two years?
a.No, the balance will be only $8,930
b.No, the balance will be only $8,798
c.Yes, the balance will be $9,067
d.Yes, the balance will be $10, 450 8th EditionN. Gregory Mankiw820 explanations
2nd EditionDavid Anderson, Margaret Ray1,042 explanations
8th EditionN. Gregory Mankiw502 explanations
3rd EditionPaul Krugman, Robin Wells312 explanations
ACCOUNTINGAssume the following scenarios.
$$
\begin{matrix}
\text{Scenario 1:} & \text{During $2018,$ IBM provides consulting services on its mainframe computer for}\\
\text{ } & \text{$\$ 11,000$ on account. The customer does not pay for those services until 2019 .}\\
\text{Scenario 2:} & \text{On January $1,2018,$ Gold's Gym sells a one-year membership for $\$ 1,200$ cash.}\\
\text{ } & \text{Normally, this type of membership would cost $\$ 1,600,$ but the company is offering}\\
\text{ } & \text{a 25$\\\%$ ""New Year's Resolution"" discount.}\\
\text{Scenario 3:} & \text{During 2018 , The Manitowoc Company provides shipbuilding services to the U.S.}\\
\text{ } & \text{Navy for $\$ 450,000$ . The U.S. Navy will pay $\$ 150,000$ at the end of each year for the}\\
\text{ } & \text{next three years, beginning in 2018 .}\\
\text{Scenario 4:} & \text{During $2018,$ Goodyear sells tires to customers on account for $\$ 35,000 .$ By the end}\\
\text{ } & \text{of the year, collections total $\$ 30,000 .$ At the of $2019,$ it becomes apparent that}\\
\text{ } & \text{the remaining $\$ 5,000$ will never be collected from customers.}\\
\end{matrix}
$$
For each scenario, calculate the amount of revenue to be recognized in 2018. ACCOUNTINGThe chart of accounts for Outback Guide Service follows.
$$
\begin{array}{ll}
\mathbf{\text{General Ledger }} & \text{ }\\
\text{101 Cash in Bank} & \text{301 Juanita Ortega, Capital}\\
\text{115 Accts. Rec. - Podaski} & \text{302 Juanita Ortega, Withdrawals}\\
\text{Systems Inc.} & \text{401 Guide Service Revenue}\\
\text{140 Computer Equipment} & \text{501 Advertising Expense}\\
\text{145 Hiking Equipment} & \text{ }\\
\text{150 Rafting Equipment} & \text{ }\\
\text{205 Accts. Pay. - Peak Equipment Inc.} & \text{ }\\
\text{207 Accts. Pay. - Premier Processors} & \text{ }\\
\end{array}
$$
1. In your working papers, open an account in the general ledger for each account in the chart of accounts. 2. Record the following transactions on page 1 of the general journal. 3. Post each journal entry to the appropriate accounts in the ledger. 4. Prove the ledger by preparing a trial balance.
$$
\begin{array}{rl}
\text{Date} & \text{Transactions}\\
\text{Mar. 1} & \text{Invested \$20,000 in cash and transferred rafting equipment }\\
\text{ } & \text{valued at \$5,000 to the business, Memorandum 35.}\\
\text{3} & \text{Purchased \$600 in hiking equipment on account from Peak}\\
\text{ } & \text{Equipment Inc., Invoice 101.}\\
\text{5} & \text{Bought a \$2,800 computer from Premier Processors and agreed}\\
\text{ } & \text{to pay for it within 60 days, Invoice 616.}\\
\text{7} & \text{Deposited \$700 cash received from clients, Receipts 310–315.}\\
\text{9} & \text{Paid \$400 to the Daily Courier for an ad, Check 652.}\\
\text{12} & \text{Sent a bill for \$900 to Podaski Systems Inc. for conducting a}\\
\text{ } & \text{group rafting trip for them, Sales Invoice 352.}\\
\text{15} & \text{Juanita Ortega wrote a check for \$800 for personal use, Check 653.}\\
\text{18} & \text{Paid Premier Processors \$1,400 to apply on account, Check 654.}\\
\text{22} & \text{Received \$900 from Podaski Systems Inc. in full payment for}\\
\text{ } & \text{the amount owed, Receipt 316.}\\
\text{27} & \text{Bought a \$500 television ad with LIVE TV, Check 655.}\\
\text{28} & \text{Paid Peak Equipment Inc. \$600 by writing Check 656. }\\
\end{array}
$$
Calculate the total change in accounts payable. ACCOUNTINGSquirrel Tree Services reports the following amounts on December 31.
$$
\begin{array}{lrlr} \text{Assets} & \text{ } & \text{Liabilities and Stockholders' Equity}\\ \hline \text{Cash} & \text{$\$ 7,700$} & \text{Accounts payable} & \text{$\$ 9,700$}\\ \text{Supplies} & \text{$1,800$} & \text{Salaries payable} & \text{$3,500$}\\ \text{Prepaid insurance} & \text{$3,500$} & \text{Notes payable} & \text{$20,000$}\\ \text{Building} & \text{$72,000$} & \text{Common stock} & \text{$40,000$}\\ \text{ } & \text{ } & \text{Retained earnings} & \text{$11,800$}\\ \end{array}
$$
In addition, the company reported the following cash flows.
$$
\begin{array}{lrlr} \text{Cash Inflows} & \text{ } & \text{Cash Outflows} & \text{ }\\ \hline \text{Customers} & \text{$\$ 60,000$} & \text{Employee salaries} & \text{$\$ 22,000$}\\ \text{Borrow from the bank (note)} & \text{$20,000$} & \text{Supplies} & \text{$4,000$}\\ \text{Sale of investments} & \text{$10,000$} & \text{Dividends} & \text{$6,500$}\\ \text{ } & \text{ } & \text{Purchase building} & \text{$62,000$}\\ \end{array}
$$
Required: 1. Prepare a balance sheet. 2. Prepare a statement of cash flows.
