For Each Situation, State the Correct Revenue or Expense Amount

question 57

Essay

For each situation, state the correct revenue or expense amount to record each year following the revenue/ expenses recognition criteria.
1. Revenue earned in 2014 will be collected in 2015 in the amount of $22,500.
2. Received bills in 2015 for $16,300 for expenses incurred in 2014.
3. Consulting services performed in 2014 for $35,000. However client only paid $2,000 in 2014 and will pay the remainder in 2015.
4. Purchased supplies for $13,000 for a job to be started on in 2015.
5. Purchased supplies for $2,300 for a job that was completed in 2014.
6. Advance payment of $88,000 received in 2014 for a contract to be completed equally in 2015 and 2016.
7. Purchased supplies for $40,000 in 2015 for a new contract that will begin in 2016.

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Definitions:

Strip-Mine

Strip-mining is an extractive mining technique used for surface mineral extraction, where layers of soil and rock are removed to access buried mineral or coal deposits.

License

A legal permission granted by an authority to engage in a particular activity or to use a particular property not owned by the license holder.

Real Property

Land and anything permanently attached to it, such as buildings, in contrast to personal property.

Easement

An easement is a legal right to use another's land for a specific limited purpose without owning it.