Question

The following selected data are taken from the comparative financial statements of Superior Curling Club. The club prepares its financial statements using the accrual basis of accounting.

September 30 2012 2011
Accounts receivable for member dues $19,470 $10,440
Unearned sales revenue 19,810 27,810
Service revenue (from member dues) 147,500 $131,300
Dues are billed to members based upon their use of the club’s facilities. Unearned sales revenues arise from the sale of tickets to events, such as the Skins Game.
(Hint: You will find it helpful to use T accounts to analyze the following data. You must analyze these data sequentially, as missing information must first be deduced before moving on. Post your journal entries as you progress, rather than waiting until the end.)
1. Prepare journal entries for each of the following events that took place during 2012. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
2. Determine the amount of cash received by the Club from the above transactions during the year ended September 30,

Answer 1

Answer and Explanation:

1. The journal entries are as follows;

a. Cash $10,440

To Accounts receivable $10,440

(being cash received is recorded)

b. Unearned sales revenue $27,810

To Sales revenue $27,810

(Being unearned sales revenue is recorded)

c. Cash $38,070

To Unearned sales revenue $38,070

(Being cash received is recorded)

Unearned sales revenue $18,260

Sales revenue $18,260

(Being unearned sales revenue is recorded)

d, Accounts receivable $147,500

To Service revenue $147,500

(being service revenue is recorded)

e. Cash $128,030

To Accounts receivable $128,030

(Being cash received is recorded)

2. Now the amount received is

= $10,440 + $38,070 + $128,030

= $176,540