Exercise 2
Austin Miller
XACC/290
4/18/2015
Alice Bergmann

BE 4-1
A) The revenue for the airlines will be recognized when the flight is complete in December. This is because the customer can still cancel and get a refund.
B) The revenue for home theater system cannot start to be recognized until the first payments are made one year later.
C) The revenue for selling game tickets online for a season can be recognized right away as most season tickets are nonrefundable. The revenue can recognized in April.
D) The revenue for the loan should be recognized when is repaid in November.
E) The revenue for sweater should be recognized when the bill is paid in October. The reason for this is because the sweater was purchased on account and that account must be paid in order for the revenue to be recognized.
P 4-2 A
(A)
1. June 30 Supplies Expense…………………………………………………….. 1,280 Supplies…………………………………………………………... 1,280 (To record supplies used)
2. 30 Utilities Expense……………………………………………………... 180 Utilities Payable……………………………………………….. 180 (To record unpaid utility bill)
3. 30 Insurance Expense…………………………………………………. 240 Prepaid Insurance……………………………………………. 240 (To record insurance expired)
4. 30 Unearned Service Revenue…………………………………… 4,100 Service Revenue…………………………………………….. 4,100 (To record revenue earned)
5. 30 Salaries and Wages Expense………….…………………… 1,250 Salaries and Wages Payable………………………… 1,250 (To record accrued salaries)
6. 30 Depreciation Expense………………………………………… 250 Accumulated Depreciation-Equipment………. 250 (To record monthly depreciation)
7. 30 Accounts