VH1 The Johnny Flowers Law Firm prepays for advertising in the local newspaper.
ID: 2342612 • Letter: V
Question
VH1 The Johnny Flowers Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $1,950 for six months of advertising Johnny Flowers Law Firm recorded $1,950 in the Prepaid Advertising account. Cash basis if Johnny Flowers Law Firm had recorded their expenses using the other method, how much advertising epense would they hve recored for the two months eding February 28Enter ths value as a positve Seashore Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Seashore Home has collected $460 from cash-paying customers. Seashore Home's remalining customers owe the business $1,010. Seashore Home recorded $460 of service revenue for the Seashore ould they hae rcorded for the Home had recorded their service revenue using the other method, how much service revenue 5 6 8Explanation / Answer
1) If they would have their expense using the Mercantile method of accounting, the expense should be recorded as $1950*2/6 = $ 650
2) Seashore home is following Cash basis of accounting.
3) Splendid occassions have recorded is using the Mercantile method of accounting.
4) If the splendid occassions intends to follow, cash basis of accounting, they would have recorded the same as revenue earned - $ 3190
5) Profit / (Loss) of Sweet Catering using Cash Basis = [ -$1800 - $210 + $100 - $3000 + $2830] = $ 2080
6) (Loss) would $ 440, rent will be taken only for 1 month, purchase of kitchen equipment shall be ignored, depreciation shall be considered.
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