
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372
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.
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
Accrual basis: This is a basis of accoun...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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