Exercise 18-30 Tyler Financial Services performs bookkeeping and tax-reporting s

Question

Exercise 18-30 Tyler Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2017, Tyler entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,000 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year the contract is modified and the fee for the third year of services is reduced to $8,000. In addition, Walleye agrees to pay an additional $20,000 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract. Prepare the journal entries for Tyler in 2017 and 2018 related to this service contract. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Prepare the journal entries for Tyler in 2019 related to the modified service contract, assuming a prospective approach.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Repeat the requirements for part (b), assuming Tyler and Walleye agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) results in a separate performance obligation. (Credit Date Account Titles and Explanation Debit Credit Question Attempts: Unlimited

Explanation / Answer

A) Date Particular Debit Credit 1-Jan-17 Cash A/C       Dr 10000    To unearned revenue A/C 10000 31-Dec-17 Unearned revenueA/C 10000 To Service revenue A/C 10000 1-Jan-18 Cash A/C       Dr 10000    To unearned revenue A/C 10000 31-Dec-18 Unearned revenueA/C 10000 To Service revenue A/C 10000 B) 1-Jan-19 Cash A/C       Dr 28000    To unearned revenue A/C 28000 31-Dec-19 Unearned revenueA/C 7000 To Service revenue A/C 7000 (28000/4) C) 1-Jan-19 Cash A/C       Dr 28000    To unearned revenue A/C 28000 31-Dec-19 Unearned revenueA/C 8000 To Service revenue A/C 8000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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