19.5 - Recording prepaid revenue
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A customer prepaid $300 for 3 tables on May 15th. By June 30th, 2 tables had been delivered, with revenue of $200 recognized. The remaining $100 in prepaid revenue was recorded as a current liability on the balance sheet. The income statement for June recorded $200 in sales revenue to match the amount recognized from the prepaid transaction.
![息 Michael Allison, Trinity Grammar School.
Authors permission required for external use
19.5 RECORDING PREPAID REVENUE
Cash [A]
31/5 Sales/GST clearing 330
GST Clearing [L]
31/5 Cash 30
Prepaid Revenue [L]
31/5 Cash 300
Cash [A]
31/5 Sales/GST clearing 330
GST Clearing [L]
31/5 Cash 30
Prepaid Revenue [L]
31/5 Cash 300
Fancy Furniture Customer
$300 + $30 GST](https://image.slidesharecdn.com/19-170509115750/85/19-5-Recording-prepaid-revenue-3-320.jpg)
![息 Michael Allison, Trinity Grammar School.
Authors permission required for external use
19.5 RECORDING PREPAID REVENUE
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
30 Jun Prepaid revenue 200
Sales 200
Prepaid Revenue [L]
31/5 Sales 200 31/5 Cash 300
Sales [R]
31/5 Prepaid revenue 200
Prepaid Revenue [L]
30/6 Sales 200 31/5 Cash 300
Sales [R]
30/6 Prepaid revenue 200
Fancy Furniture Customer
Fancy Furniture
makes the furniture
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
30 Jun Prepaid revenue 200
Sales 200
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
30 Jun Prepaid revenue 200
Sales 200](https://image.slidesharecdn.com/19-170509115750/85/19-5-Recording-prepaid-revenue-5-320.jpg)
![息 Michael Allison, Trinity Grammar School.
Authors permission required for external use
19.5 RECORDING PREPAID REVENUE
Fancy Furniture Customer
Fancy Furniture
makes the furniture
Prepaid Revenue [L]
30/6 Sales 200 31/5 Cash 300
Sales [R]
30/6 Prepaid revenue 200
Prepaid Revenue [L]
30/6 Sales 200 31/5 Cash 300
300 300
Prepaid Revenue [L]
30/6 Sales 200 31/5 Cash 300
30/6 Balance 100
300 300
Prepaid Revenue [L]
30/6 Sales 200 31/5 Cash 300
30/6 Balance 100
300 300
1/7 Balance 100
Sales [R]
30/6 Profit and loss summary 200 30/6 Prepaid revenue 200
Sales [R]
30/6 Profit and loss summary 200 30/6 Prepaid revenue 200
200 200](https://image.slidesharecdn.com/19-170509115750/85/19-5-Recording-prepaid-revenue-6-320.jpg)
19.5 - Recording prepaid revenue
- 2. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use A customer ordered 3 tables on 15 May and paid upfront: Selling price = $100 each (plus GST) Cost = $40 each (plus GST) 19.5 RECORDING PREPAID REVENUE Fancy Furniture Customer Fancy Furniture makes the furniture $300 + $30 GST May June Customer prepaid
- 3. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use 19.5 RECORDING PREPAID REVENUE Cash [A] 31/5 Sales/GST clearing 330 GST Clearing [L] 31/5 Cash 30 Prepaid Revenue [L] 31/5 Cash 300 Cash [A] 31/5 Sales/GST clearing 330 GST Clearing [L] 31/5 Cash 30 Prepaid Revenue [L] 31/5 Cash 300 Fancy Furniture Customer $300 + $30 GST
- 4. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use By balance-day on 30 June: 2 tables have been made and delivered to the customer 1 table remains unfinished Fancy Furniture Customer Fancy Furniture makes the furniture 19.5 RECORDING PREPAID REVENUE May June Customer prepaid Balance-day Revenue earned Liability
- 5. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use 19.5 RECORDING PREPAID REVENUE General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit 30 Jun Prepaid revenue 200 Sales 200 Prepaid Revenue [L] 31/5 Sales 200 31/5 Cash 300 Sales [R] 31/5 Prepaid revenue 200 Prepaid Revenue [L] 30/6 Sales 200 31/5 Cash 300 Sales [R] 30/6 Prepaid revenue 200 Fancy Furniture Customer Fancy Furniture makes the furniture General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit 30 Jun Prepaid revenue 200 Sales 200 General Journal Date Details General Ledger Subsidiary Ledger Debit Credit Debit Credit 30 Jun Prepaid revenue 200 Sales 200
- 6. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use 19.5 RECORDING PREPAID REVENUE Fancy Furniture Customer Fancy Furniture makes the furniture Prepaid Revenue [L] 30/6 Sales 200 31/5 Cash 300 Sales [R] 30/6 Prepaid revenue 200 Prepaid Revenue [L] 30/6 Sales 200 31/5 Cash 300 300 300 Prepaid Revenue [L] 30/6 Sales 200 31/5 Cash 300 30/6 Balance 100 300 300 Prepaid Revenue [L] 30/6 Sales 200 31/5 Cash 300 30/6 Balance 100 300 300 1/7 Balance 100 Sales [R] 30/6 Profit and loss summary 200 30/6 Prepaid revenue 200 Sales [R] 30/6 Profit and loss summary 200 30/6 Prepaid revenue 200 200 200
- 7. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use The firms financial reports can now be prepared Balance Sheet (Extract) as at 30 June 2015 Current Liabilities $ $ Prepaid Revenue 100 Income Statement (Extract) for June 2015 Revenue $ $ Sales 200 19.5 RECORDING PREPAID REVENUE Balance Sheet (Extract) as at 30 June 2015 Current Liabilities $ $ Prepaid Revenue 100 Income Statement (Extract) for June 2015 Revenue $ $ Sales 200
- 8. 息 Michael Allison, Trinity Grammar School. Authors permission required for external use TASK In-class Homework SQ5 X Ex19.1 X Ex19.2 X Ex19.3 X