Question

30. On May 1, 2019, Luke paid LinkedIn $1,200 for his 2-year subscription for online professional...

30. On May 1, 2019, Luke paid LinkedIn $1,200 for his 2-year subscription for online professional networking.   The subscription starts immediately.   What amount of revenue should LinkedIn record for the years of 2019 and 2020?

A. Year 2019 = $1,200; Year 2020 = $0

B. Year 2019 = $600, Year 2020 = $600

C. Year 2019 = $400; Year 2020 = $600

D. The answer cannot be determined based on the information given

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

C) Year 2019= $ 400 , year 2020 = $ 600 is correct alternative

Explanation :

As per accrual basis of accounting, revenues can be recorded only when service has been rendered . Cash received or not it is totally immaterial to record revenue.

Journal entry for 2019

Date Account titles Debit Credit
May 1,2019 Cash $ 1,200
Unearned revenue $ 1,200
December 31, 2019 Unearned revenue $ 400
Service revenue [ $ 1,200/ 24] X 8 $ 400
( Service revenue recorded for 8 months of service rendering from may 19 to December 19)

Journal entry for 2020

Date Account titles Debit Credit
December 31,2020 Unearned revenue $ 600
Service revenue ( $ 1,200/ 24) X 12 $ 600
( Service revenue recorded for the period of 12 months ( 1/1/20 to 31/12/20)
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On May 1 2020, Desa Petaling Cleaning Services paid $1,200 for a one-year fire insurance policy...
On May 1 2020, Desa Petaling Cleaning Services paid $1,200 for a one-year fire insurance policy beginning May 1. The payment was recorded as Debit in Prepaid Insurance. On May 31 the account shows a balance of $1,200. Each month insurance expires $100 (i.e., $1,200 ÷ 12 months). Based on this information, answer the following questions: i. Make the necessary journal entries for the above transaction in complying with the concept of revenues and expenses recognition. ii. How does accrual...
Reed Ltd is a manufacturer of surfboards which commenced operations on 1 July 2019. The Statement...
Reed Ltd is a manufacturer of surfboards which commenced operations on 1 July 2019. The Statement of Comprehensive Income and the Statement of Financial Position were compiled on 30 June 2020. The following information was available: Statement of Comprehensive Income for the year ended 30 June 2020   $                      $ Sales 430,000 Less Cost of Goods Sold 130,000 Administrative expense     70,000 Warranty expense 60,000 Depreciation- machine     40,000 Insurance expense    20,000    320,000 Profit before income tax 110,000 Following information was extracted...
The following independent situations require professional judgement to determine when to recognize revenue under the revenue...
The following independent situations require professional judgement to determine when to recognize revenue under the revenue recognition principle.   Identify the month in which revenue should be recognized for the following transactions: 8.   On January 2nd, 2019 you order and pay for 2 tickets on your Visa card for the February 28th, 2019 Canucks game against San Jose. You receive the tickets in the mail on January 9th. You receive the Visa bill in late January but you don’t pay your...
The financial year for Peter Jones runs from 1 July to 30 June each year. The...
The financial year for Peter Jones runs from 1 July to 30 June each year. The following transactions occurred during the 2019 and 2020 financial year. Jones uses the allowance method to measure bad debts. Note 1: Ignore GST. Note 2: Narrations are not required Dates Transactions Financial year ending 30 June 2019 June 30 Jones expects the bad debts expense to be 3% of the credit sales figure of $150,000. (ENTRY REQUIRED) June 30 The bad debts expense account...
The following information pertains to the next three questions. At the beginning of the current year,...
The following information pertains to the next three questions. At the beginning of the current year, X Company had assets of $1,800, liabilities of $900, and common stock of $300. During the current year, the company earned revenue of $2,250, incurred expenses of $1,500, and paid dividends of $300. All transactions were cash transactions. 1. The amount of net income reported on the income statement for the current year would be $900. $750. $450. none of the above. Question 2...
Exercise 3-8 Marigold Corp. opened a dental practice on January 1, 2019. During the first month...
Exercise 3-8 Marigold Corp. opened a dental practice on January 1, 2019. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. On January 31, $840 of such services were performed but not yet recorded. 2. Utility expenses incurred but not paid before January 31 totaled $600. 3. Purchased dental equipment on January 1 for $87,000, paying $30,000 in cash and signing a $57,000, 3-year note payable. The equipment depreciates...
Teal Mountain Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old...
Teal Mountain Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equipment and accessory stores. Magilke paid $850,000 cash for Old Master. At the time, Old Master’s balance sheet reported assets of $630,000 and liabilities of $190,000 (thus owners’ equity was $440,000). The fair value of Old Master’s assets is estimated...
Question 36 ABC Company issues $10,000,000, 8%, 10-year bonds at 96.5 on July 1, 2019. Interest...
Question 36 ABC Company issues $10,000,000, 8%, 10-year bonds at 96.5 on July 1, 2019. Interest is paid on July 1 and January 1. The journal entry to record the issuance will include a debit to cash for $10,000,000 a credit to cash for $9,650,000 a credit to bonds payable for $9,650,000 a debit to discount on bonds payable for $350,000 Question 37 DEF Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of...
Question 1: (25 marks) On 1 July 2015, I Ltd. acquired a 30% interest in one...
Question 1: On 1 July 2015, I Ltd. acquired a 30% interest in one of its suppliers, G Ltd., at a cost of 13,650. The directors of I Ltd. believe they exert 'significant influence' over G Ltd. The equity of G Ltd. at acquisition was: Share capital (20000 shares) $20,000 Retained earnings $10,000 All the identifiable assets and liabilities of G Ltd. at 1 July 2015 were recorded at fair value except for some depreciable non-current assets with a fair...
1. On October 1, 20X1, ABC Limited makes available bonds that can be purchased by investors...
1. On October 1, 20X1, ABC Limited makes available bonds that can be purchased by investors at a market value of 107. Your company buys a bond with a face or maturity value of $200,000 on that date. The bond pays interest annually on September 30 starting in 20X2. When the bond was purchased, the market interest rate was 2% and the stated or coupon interest rate on the bond was 4%. Your company has a year-end on December 31,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT