HW3 Check my work Required: ount (Enter your answers in dollars but not For each

Question

HW3 Check my work Required: ount (Enter your answers in dollars but not For each of the transactions, if revenue is to be recognized in September, indicate the am in millions.) 2 points Activity Amount a. Guppie Enterprises Inc. issued $18 million in new common stock Chrome University received $23,030,000 cash for 94,000 five-game-season football tickets. None of the games have been played eBook c. Chrome played the first football game referred to in (b). Prim Construction Company signed a contract with a customer for the construction of a new $566,000 warehouse. At the signing, Mell received a check for $56,600 as a deposit to be applied against amounts eaned during the first phase of d. e. I from subscribers. The subscriptions begin in the next fscal year. Answer from the magazine company's standpoint. TrusTee Communications sold a $585 cell phone plan for service in September . to a customer who charged the sale on his credit card. Answer from the Prev 1 of 4 Next>

Explanation / Answer

Question 1

Under accrual basis of accounting, a revenue will be recognised when it is earned and a revenue is said to be earned not when the cash is received but when the goods are sold or services are provided.

Question 2

a. Issued $18 million Common stock It is the capital for the company which uses the money for its operations.. Not a revenue of the company. b. Received $23,030,000 cash for 94,000 football tickets for the games that have not been played yet. Since the games have not been played yet, Chrome university shall not recognise the amount received as revenue as the university doesn't earn the money yet. c. First football game played Shall recognise the amount for the first football game as revenue in september d. Mell Construction recieived deposit of $566,000 for a constuction which has not been started yet. Not a revenue as mell contstruction does not earn the money yet. e. Received $2,700 for the subscriptions which will start in next year. Not a revenue as the magazine company does not earned it. The magazine company received the money in advance and shall record the amount as a liability untill the subscriptions begin. f. Sale of $595 cell phone plan for service in september It shall be recorded as a revenue in the month of september as the company provided the service in september i.e earns in september.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.