Question

On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022. During December of 2021, the company also performed $165,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company’s trial balance showed service revenue of $1,425,790 at December 31, 2021. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected. If Coaster Trucks makes the appropriate adjusting entry, how much service revenue will be reflected on the December 31, 2021 income statement?

Answer 1

the service revenue is $1,590,790

Step-by-step explanation:

The computation of the service revenue is shown below:

= Service revenue in trial balance + Services that were neither billed nor paid

= $1,425,790 + $165,000

= $1,590,790

hence, the service revenue is $1,590,790

We simply added the above two amounts