Preparing Adjusting Entries an Asset to an Expense and to Convert a liability to revenue

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In April a sports team collected $4,500,000 cash from the sale of season tickets for the teams home games. The entire amount was initially recorded as Unearned Ticket Revenue. During the month of May, the team played several home games at which $148,800 of the season tickets sold in April were used by fans.

May 30th, 2015
Number two you would debit the unearned revenue liability for $148,800 and credit revenue for $148,800. The April entry would have recorded the $4.5 as debit to cash and the $4.5 credit would go against unearned revenue (liability). Thus you would not debit cash for the May entry.

As for the concept most companies don't recorded revenue till it is earned and expenses are not expensed until they are incurred. Since the team received the $4.5 in advance tickets sales they had not earned the income yet because they team had not played a game. Same goes for the rent, since they team had not played a match till May they would not expense the rent until they actually used the stadium. Hope this helps =)


May 30th, 2015

Thank you So the $4.5 would be recorded for April 30 as Transaction Entry and the 148,000 would be recorded for May 30 for the adjusted entries?

May 30th, 2015

rite welcome................................rate me 5s tar

May 30th, 2015

Will do thank you

May 30th, 2015

must......................................welcome

May 30th, 2015

done

May 30th, 2015

Another Question: The company's policy is to pay its employees every Friday/ Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400

a. Record the necessary adjusting journal entries on December 31, 2011

b. By how much did the companies net income increase or decrease as a result of the entries performed in part a. (Ignore Income Taxes)

May 30th, 2015

For a. My answer is

Dec. 31  Wages Expense………....…………………………………………………………… 2,400
                      Wages Payable……...…………………………………..……….. 2,400
Adusting entry to accrue wages owed but unpaid as of December 31
Is there another entry I need to make?

May 30th, 2015

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May 30th, 2015
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