M$3-16.$ Assessing Financial Statement Effects of Transactions and Adjustments

Schrand Services offers janitorial services on both a contract basis and an hourly basis. On January $1,$ Schrand collected $$26,100$ cash in advance on a six$-$month contract for work to be performed evenly during the next six months.

a$.$ Prepare the entry on January $1$ to reflect the receipt of $$26,100$ cash for contract work; use the financial statement effects template.

b$.$ Adjust the appropriate accounts on January $31$ for the contract work done during January; use the financial statement effects template.

c$.$ At January $31,$ a total of $30$ hours of hourly rate janitor work was performed but unbilled. The billing rate is $$19$ per hour. Prepare the accounting adjustment needed on January $31$ using the financial statement effects template. $($The firm uses the fees receivable account to reflect revenue earned but not yet billed.$)$