Exercise 3-15 (Part Level Submission) December 31 2015 2014 (a) No. Account Titl
ID: 2508943 • Letter: E
Question
Exercise 3-15 (Part Level Submission)
December 31
2015
2014
(a)
No.
Account Titles and Explanation
Debit
Credit
Exercise 3-15 (Part Level Submission)
The following data are taken from the comparative balance sheets of Cascade Billiards Club, which prepares its financial statements using the accrual basis of accounting.December 31
2015
2014
Accounts receivable from members $13,823 $ 8,853 Unearned service revenue 17,886 25,979Members are billed based upon their use of the club’s facilities. Unearned service revenues arise from the sale of gift certificates, which members can apply to their future use of club facilities. The 2015 income statement for the club showed that service revenue of $156,000 was earned during the year.
Explanation / Answer
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Account Debit Credit 1. Accounts receivable from 2014 were all collected. Cash 8853 Accounts Receivable 8853 (Accounts receivable from 2014 were all collected) 2. Gift certificates outstanding at the end of 2014 were all redeemed Unearned Service Revenue 25979 Service Revenue 25979 (Gift certificates outstanding at the end of 2014 were all redeemed) 3a. An additional $37,353 worth of gift certificates were sold during 2015 Cash 37353 Unearned Service Revenue 37353 (Additional gift certificate sold during 2015) 3b. A portion of the above gift certificates was used by the recipients during the year; the remainder was still outstanding at the end of 2015. Unearned Service Revenue 19467 Service Revenue 19467 (Sold 37353-Closing balance 17886) 4. Services performed for members for 2015 were billed to members Accounts Receivable 110554 Service Revenue 110554 (Services performed billed) Service Revenue earned during year 156000 Less: of 2014 gift certificates 25979 less: of 2015 gift certificates 19467 Net 110554 5. Accounts receivable for 2015 (i.e., those billed in item [4] above) were partially collected. Cash 96731 Accounts Receivable 96731 (Billed 110554-13823 closing) collectred Cash Amount Received: 142937 8853+37353+96731Related Questions
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