Epee Inc Frequently Has Accrued Revenues at the End of Its

question 138

Essay

Epee Inc. frequently has accrued revenues at the end of its fiscal year that should be recorded for proper financial statement presentation. Epee Inc.'s fiscal year ends on September 30 of the current year. Epee Inc. has determined through an evaluation of invoices and services rendered that $32,000 of services has been provided as of September 30, but not yet billed. The total contract to be billed for services when completed will be $60,000. Record the following entries:
(a) Accrual of the revenues on September 30.
(b) Receipt of payment from customers on October 9 for the services rendered, assuming that Epee does not prepare reversing entries.
(c) Assuming that Epee prepares reversing entries, reverse the adjusting entry made on September 30.
(d) Assuming that Epee prepares reversing entries, receipt of the payment for the total contract amount on October 9.

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