Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below) Lakewood Tennis Club (LTC) operates an indoor tennis facility. The company charges a $170 annual membership fee plus a member rental rate of $12 per court per hour. LTC's fiscal year-end is August 31. LTC's revenue recognition policy is described in its financial statement notes as follows Revenue Recognition-LTC generates revenue from two sources. Annual membership fees arise from providing 12 months of services to members, so they are reported as membership revenue each month as these services are provided. Court rental fees are generated by renting courts each day, so they are reported as service revenue when courts are used by members. On August 31, 6 new members joined and paid the annual membership fee in until September 1. For the week ended September 11, LTC provided 220 court-hours of rental services for members cash. The memberships do not begin s balls and other suppl and collected its fees in cash. On S regular retail price was $305, but LTC negotiated a lower amount ($290) that is to be paid in October On September urchased ceived tenni 15, LTC paid $2,400 to employees for the hours they worked from Septemper 1-15. For the two weeks ended September 25, LTC provided 372 court-hours for members and collected its fees in cash. On September 26, LTC's courts were used for a member's birthday party LTC expects the member to pay the special event booking fee of $220 on Saturday, October 2. On September 27, LTC wrote a $390 check to an advertising company to prepare advertising flyers that will be inserted in local newspapers on October 1. On September 29, LTC received $220 on account for th member's birthday party that was held on September 26. On September 30, LTC submitted its electricity and natural gas meter readings online. According to the suppliers' Websites, the total charges for the month will be $340. This amount will be paid on October 17 through a preauthorized online payment

Explanation / Answer

Accounting equation effects of the given transactions will be shown as follows:

Assets = Liabilities + Stockholders' Equity Aug. 31 Cash 1020 Unearned Membership Revenue 1020 Sept. 11 Cash 2640 Service Revenue 2640 Sept. 13 Supplies 290 Accounts Payable 290 Sept. 15 Cash -2400 Wages Expense -2400 Sept. 25 Cash 4464 Service Revenue 4464 Sept. 26 Accounts Receivable 220 Event Booking Fee/Rental Revenue 220 Sept. 27 Prepaid Expenses 390 Cash -390 Sept. 29 Cash 220 Accounts Receivable -220 Sept. 30 Accounts Payable 340 Utilities Expense -340

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