ACCT 110 Lecture Notes - Lecture 5: Santa Barbara City College
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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. | ||||||||
Customer is Civic Corporation | 1 | |||||
Tax consulting begins on November 1st and runs through the next April | 11/1/X7 | |||||
Date of contract | 11/1/X7 | |||||
Length of consulting services | 6 months | months | ||||
Tax return preparation occurs over the period February through April of | 20X8 | |||||
Length of tax prepartion | 3 months | |||||
Price of tax preparation to be allocated over the return preparation period | $ 2,000 | stand alone price | ||||
Price of consulting services to be allocated over consulting period | $ 5,000 | stand alone price | ||||
Customers are charged a lesser amount as follows for both tax and consulting | $ 6,000 | |||||
Anderson Accounting Services LLC's current year end | 12/31/X7 | |||||
Customers pay at the contract date for BOTH the consulting and tax preparation services. |
What are the performance obligations in the contract?
A. | Tax preparation services | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | Tax preparation services and tax consulting services | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | Unable to determine | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D.Tax consulting services QUESTION 3 Determine the transaction price that should be allocated to the consulting services.
QUESTION 4 Calculate the total revenue that should be recognized in the current accounting period.
QUESTION 5 What is the total amount in the deferred revenue account(s) at the end of the current accounting period?
QUESTION 6 What is the total amount of revenue that should be recognized in the NEXT accounting period period?
QUESTION 7 The following journal entry has what impact on the income statement? Debit Cash XXX Credit Deferred Revenue XXX
QUESTION 8 The following journal entry has what impact on the income statement? Debit Cash XXX Credit Accounts Receivable XXX
QUESTION 9
QUESTION 10
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