Homework SourseAnderson Accounting Services LLC provides accounting and tax
Anderson Accounting Services LLC provides accounting and tax preparation and consulting services. Sometimes customers only wish to have financial statements and/or tax returns prepared. Sometimes customers bundle accounting and tax preparation with consulting services (to be provided over a period of time). Sometimes customers only wish to have consulting services provided over a period of time. Because Anderson is a service firm there is no cost of goods sold associated with their services.
What are the performance obligations in the contract?
Tax preparation services
Tax preparation services and tax consulting services
Unable to determine
D.Tax consulting services
QUESTION 3
Determine the transaction price that should be allocated to the consulting services.
$4,286
$1,714
$1,429
$4,571
QUESTION 4
Calculate the total revenue that should be recognized in the current accounting period.
$4,571
$1,714
$1,429
D. $4,286
QUESTION 5
What is the total amount in the deferred revenue account(s) at the end of the current accounting period?
$1,714
$4,571
$4,286
$1,429
QUESTION 6
What is the total amount of revenue that should be recognized in the NEXT accounting period period?
$1,714
$4,286
$1,429
$4,571
QUESTION 7
The following journal entry has what impact on the income statement?
Debit Cash XXX
Credit Deferred Revenue XXX
No impact
Decrease
Increase
QUESTION 8
The following journal entry has what impact on the income statement?
Debit Cash XXX
Credit Accounts Receivable XXX
No impact
Increase
Decrease
QUESTION 9
Revenue is defined as:
An inflow or other enhancements of assets of an entity or settlement of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitute the entity’s ongoing major or central operations.
Revenue is recognized from the settlement of which of the following liabilities:
Discount on Bonds Payable
Deferred Revenue
Salaries Payable
Accrued Interest
QUESTION 10
TRUE
FALSE
| Anderson Accounting Services LLC provides accounting and tax preparation and consulting services. Sometimes customers only wish to have financial statements and/or tax returns prepared. Sometimes customers bundle accounting and tax preparation with consulting services (to be provided over a period of time). Sometimes customers only wish to have consulting services provided over a period of time. Because Anderson is a service firm there is no cost of goods sold associated with their services. |
Solution
Q2. Tax preparation services and tax consulting services
Q3. Option A- 4,286
Q4. Option C- $1,429
Q5. B - $4,571
Q6. Option D. $4,571
Q7. Option A- No Impact
Deferred Revenue will be shown in the balance sheet as the current liability
Q8. No Impact
Debit Cash will increase the Cash and Credit Receivables will Decrease the Receivables. No impact on the Income Statements.
Q9. B- Deferred Revenue
Q10 - True
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| Total Contract Price | $ 6,000 |
| Stand Alone Price | |
| Consulting services | $ 5,000 |
| Tax preparation | $ 2,000 |
| Total Price | $ 7,000 |
| Allocated to Consulting (6000/7000*5000) | $ 4,286 |
