Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / he Spinnaker Company received $4,500 in cash from a customer who ordered a customer sail

he Spinnaker Company received $4,500 in cash from a customer who ordered a customer sail

How Unearned Revenue inks Cash and SalesRevenue

On March 15, the Spinnaker Company received $4,500 in cash from a customer who ordered a customer sail for her racing yacht. The company completed the sail and delivered it on April 30. The Spinnaker Company incurred costs of $3,000 in making the sail. Assume the company recorded the manufacturing costs in the Merchandise Inventory account.

  1. Record the transaction on March 15.
  2. Record the transaction on April 30.
  3. Prepare a table similar to Exhibit 2 that illustrates how Unearned Revenue links Cash with Sales Revenue.

    Example:Date                 Cash               UnearnedRevenue          Sales Revenue

                 Feb.24                   3,000                         3,000        

                 Mar.3                                                         -3,000                               3,000

               Net result            3,000                             0                                     3,000

Apr 30 2018 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions