The accounting records for Patricia Event Planning Services include the followin

Question

The accounting records for Patricia Event Planning Services include the following select unadjusted balances on December 2016: Salaries Expense, S6.000; Service Revenue. $17,000; Unearned Revenue, $400; Supplies Expense, S600, Rent Expense, $300; Depreciation Expense -Equipment, $200. During December, the company worked with a new client and provided event planning services for an upcoming event. It will receive the full amount of $2100 when the event is completed in January 2017. As of the end of December 2016, it performed one-third of the services covered by the contract The company made the accrual adjustments. The balance of Service Revenue, as shown on the adjusted trial balance, should be a___. credit balance of $17,000 credit balance of $17,700 debit balance of $2100 debit balance of $19,100

Explanation / Answer

Balance of Service revenue as per unadjusted trial balance = $17,000 credit

Service revenue accrued from new contract = 1/3 * Contract value = $2,100/3 = $700

Balance of service revenue in adjusted trial balance = $17,000 + $700 = $17,700 Credit

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