Consider the following transactions of Parolini Company for 2008

Consider the following transactions of Parolini Company for 2008.

1. Sold a 6-month insurance policy to Orosco Corporation for $9,000 on March
2. Leased office space to Easley Supplies for a 1-year period beginning September 1.The rent of $30,000 was paid in advance.
3. Received a deposit of $10,000 for an office space in September from Alpha Corporation. The space will not be available until October 2008.
4. Sold a 12 month insurance policy to Great Idea Corporation for $12,000 on June 1, 2008.

Instructions
For each item above, indicate the amount of revenue Parolini should recognize in calendar year 2008. Explain.

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ACC 225 Week Three (Week 3) Solution

ACC 225
Axia College of University of Phoenix (UoP)
Financial Accounting

Larson, K. D., Wild, J. J., & Chiappetta B. (2005). Fundamental accounting principles (17th ed.)

Week Three (Week 3) Solution

Discussion Question 2
• Due Date: Day 4 [Main] forum
• Post your response to the following: The Ritz Manor is a popular seaside resort. A double room costs $220 for one night. In order to reserve a room, guests must pay one night’s stay in advance. On each floor of the hotel, Vendalite Company operates vending machines with energy bars, juices, and other snacks for guests. Vendalite stocks the
machines and collects revenue every week. Total average weekly revenue from these machines is $720. The Ritz Manor is entitled to 30% of the revenue from the machines. Vendalite sends a check to the Ritz Manor once at the end of each quarter for the resort’s share of the revenue.
o Based on this information, what type of adjusting entries does the Ritz Manor have?
o How are the amounts of these adjustments determined?
o Which accounts are affected?


CheckPoint: Adjustments and Accrual and Cash Basis Accounting
• Resource: Fundamental Accounting Principles, pp. 116-118 and 120
• Due Date: Day 5 [Individual] forum
• Complete Quick Study questions QS 3-1 and QS 3-9 on pp. 116 and 117 and Exercises 3-1 and 3-7 on pp. 118 and 120.
• Post your answers as an attachment.

 Click here for the solution: ACC 225 Week Three (Week 3) Solution