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book Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby cover

Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Edition 4ISBN: 978-0078025372
book Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby cover

Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Edition 4ISBN: 978-0078025372
Exercise 5
Preparing Accrual Basis Journal Entries for Business Activities
Junktrader is an online company that specializes in matching buyers and sellers of used items. Buyers and sellers can purchase a membership with Junktrader, which provides them advance notice of potentially attractive offers. Prepare journal entries for the following transactions, which occurred during a recent month, and determine Junktrader's preliminary net income.
a. Junktrader provided online advertising services for another company for $200 on account.
b. On the last day of the month, Junktrader paid $50 cash to run an ad promoting the company's services. The ad ran that day in the local newspaper.
c. Received $200 cash in membership fees for the month from new members.
d. Received an electricity bill for $85, for usage this month. The bill will be paid next month.
e. Billed a customer $180 for helping sell some junk. Junktrader expects to receive the customer's payment by the end of next month.
Explanation
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Accrual basis: This is a basis of accoun...

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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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