Neveranerror, Inc. was organized on June 1, 2012 by a group of accountants to pr
ID: 2420538 • Letter: N
Question
Neveranerror, Inc. was organized on June 1, 2012 by a group of accountants to provide accounting and tax services to small businesses. The following transactions occurred during June, its first month of operations: On June 1, Neveranerror received contributions totaling $50,000 from the owners of the business in exchange for shares of stock. On June 5, Neveranerror purchased a computer system for $12,000. The agreement with the vendor requires a down payment of $2,500 with the balance duo in 60 days. On June 15, Neveranerror sent bills to clients totaling $12,350 for services rendered during the first two weeks of June. On June 17, Neveranerror paid a $900 bill from the local newspaper for advertising for the month of June. On June 21, Neveranerror received 80% of the amount billed to clients on June 15. On June 28, Neveranerror received and paid gas, electric, and water bills totaling $2,700.On June 29, Neveranerror received the landlord's bill for $2,200 for rent on the office space that Neveranerror leases. The bill is due by the 10th of the following month. On June 30, Neveranerror paid salaries and wages for June amounting to $5,940. The journal entry made by Neveranerror to record the Juno 15 transaction would be: Cash.........................12.550 Sales revenue.......................12,550 Sales revenue............12.550 Accounts receivable ..............12,550 Accounts receivable ...12.550 Cash...................................12,550 Accounts receivable .... 12.550 Sales revenue.......................12.550 Cash.........................12,550 Accounts receivable ...............12,550 none of the above journal entries are correctExplanation / Answer
d) Accounts Receivable $12350
Sales Revenue $12350
As the Neveranerror has sent the bills to the client on account not on cash so accounts receivable is debted and it is a sale so credited.