The following data are taken from the comparative balance sheets of Bundies Billiards Club, which prepares its
Question:
Members are billed based upon their use of the clubs facilities. Unearned service revenues arise from the sale of gift certificates, which members can apply to their future use of club facilities. The 2020 income statement for the club showed that service revenue of $161,000 was earned during the year.
Instructions
a. Prepare journal entries for each of the following events that took place during 2020.
1. Accounts receivable from 2019 were all collected.
2. Gift certificates outstanding at the end of 2019 were all redeemed.
3. An additional $38,000 worth of gift certificates were sold during 2020. A portion of these was used by the recipients during the year; the remainder was still outstanding at the end of 2020.
4. Services performed for members for 2020 were billed to members.
5. Accounts receivable for 2020 (i.e., those billed in item [4] above) were partially collected.
b. Determine the amount of cash received by the club, with respect to member services, during 2020.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso