Question

The following transactions and events are provided by the records of Deerfield Cleaning (a corporation) at the end of its fiscal year, December 31, 2015:
Cash Receipts and Revenue
a. Cash collected in January 2015 for the only cleaning contracts
completed in past years that were not yet paid by customers....... $ 11,000
b. Service revenue collected in cash during 2015
for cleaning contracts in 2015.................... 213,000
c. Service revenue earned for contracts in December
2015 but not collected until 2016..................... 14,000
d. Amount collected in advance in December 2015 for service
to be provided in January 2016 ...................... 19,000
Salaries
e. Cash payment made in January 2015 for employee salaries earned in 2014;
no other amounts were due to employees for past periods ............ 1,500
f. Salaries incurred and paid during 2015 78,000
g. Salaries earned by employees during December 2015
that will be paid in January 2016 ...................... 1,900
Supplies
h. Cleaning supplies inventory on January 1, 2015 .............. 1,800
i. Cleaning supplies purchased for cash during 2015 ........... 14,500
j. Cleaning supplies inventory on December 31, 2015 ............ 2,700
Required:
For each of the following accounts, compute the balance that should be reported in Deerfield’s 2015 financial statements, indicate on which financial statement the item will be reported, and report the effect (direction and amount) on cash flows (+ for increase, – for decrease, and “ N” for no effect). (Hint: Create T- accounts to determine account balances.)


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  • CreatedAugust 04, 2015
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