Family Services Centre (The Centre) performed service for a client who could not pay immediately. The Centre expected to collect the $500 the following month. A month later, The Centre received $100 cash from the client.
1. Record the two transactions on the books of Family Services Centre. Include an explanation for each transaction.
2. Open these T-accounts: Cash, Accounts Receivable, and Service Revenue. Post to all three accounts. Compute each account balance and denote as Bal.
3. Answer these questions based on your analysis:
a. How much did The Centre earn? Which account shows this amount?
b. How much in total assets did The Centre acquire as a result of the two transactions? Show the amount of each asset.