If Splendid Occasions had recorded their service revenue using the other method,
ID: 2539481 • Letter: I
Question
If Splendid Occasions had recorded their service revenue using the other method, how much service 3550 Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $1,500 May 5: Recelved and paid electricity bill, $160 May 9: May 14: Paid cash for kitchen equipment, $2,840 May 23: Served a banquet on account, $2,940 May 31: Made the adjusting entry for rent (from May 1) May 31: Accrued salary expense, $3,670 May 31: Recorded depreciation for May on kitchen equipment, $130 d cash for meals served to customers, $2,080 f Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. If Sweet Catering had recorded tra there is a loss, enter it with parentheses or a negative sign. using the Accrual method, how much net income (loss) would they have recorded for the month of May? If RESET Incorrect. Try reviewing the Hint to better understand the goal of this a CHECK ANSWER incorrect. Try reviewing the Hint to better understand the goal of this activityExplanation / Answer
Answer
Cash Method
In Cash approach we record expenses which are paid in cash and Incomes which are received in Cash irrespective of the fact whether it is of Current period or not.
Income Statement
$
Incomes
May 9
Cash received for meals served
2,080
Cash Expenses
May 1
Rent paid for 3 months
(1,500)
May 5
Paid electricity bill
(160)
Net Income
420
Net Income under Cash Method = $420
Note
Purchase of Kitchen equipment is not expense, we have purchased an asset so it will not come in Income Statement
Accrual Method
In Accrual Method we record expenses which are of current period irrespective of the fact that it is paid in cash or not and record incomes which are earned in the current period irrespective of the fact that cash received or not.
Income Statement
$
Incomes
May 9
Cash received for meals served
2,080
May 23
Served on Banquet
2,940
Expenses
May 5
Paid electricity bill
(160)
May 31
Accrued Salary expense
(3,670)
May 31
Rent paid for 1 months ($1500 / 3 months)
(500)
May 31
Depreciation on Kitchen Equipment
(130)
Net Income
560
Net Income under Accrual Method = $560
Dear Student, Only 1 Question is allowed but still i am answering 2nd Question.
Answer 2
I am only telling what u missed in trial balance and on which side they will come
1. Dividends is an expense and has a Debit balance.
2. Salaries expense is an expense and has a Debit balance.
3. Service Revenue is Income and has a Credit balance.
I hope above answer will complete your answer and next time plz upload clear image as in Question 2, the image is not clear.
If you have any doubt plz let me know.
$
Incomes
May 9
Cash received for meals served
2,080
Cash Expenses
May 1
Rent paid for 3 months
(1,500)
May 5
Paid electricity bill
(160)
Net Income
420