Clean Sweep Services runs a professional office cleaning service. Its clients are charged $1200 a month plus
Question:
Clean Sweep Services runs a professional office cleaning service. Its clients are charged $1200 a month plus $120 GST for the service and tax invoices are prepared four times a year on 31 January, 30 April, 31 July and 31 October. Quarterly payments are due by the fifteenth of the month following the end of a quarter. The balance in the Cleaning Fees Revenue account was $264 000 on 31 December, the end of the period. Service fees for November and December not yet recorded were $44 000.
Required
A. Prepare the adjusting entry in the general journal to record the fees revenue.
B. Assuming that reversing entries are not made, record the receipt of a $3960 quarterly payment from a client on 12 February and the receipt of $2640 on 13 February from a new client who had contracted for the service to start on 1 December.
C. Assuming that reversing entries are made to facilitate the record-keeping process, prepare the appropriate reversing entry, if any, and the receipt of cash on 12 and 13 February.
Step by Step Answer:
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett