question archive On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022
On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022
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On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022. During December of 2021, the company also performed $165,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company’s trial balance showed service revenue of $1,425,790 at December 31, 2021. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected.
If Coaster Trucks makes the appropriate adjusting entry, how much service revenue will be reflected on the December 31, 2021 income statement?
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Answer:
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Amount of service revenue that will be reflected in Dec 31, 2021 income statement = Service revenue in trial balance + Services that were neither billed nor paid = 1,425,790 + 165,000 = 1,590,790 |
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