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The balance in Unearned Revenues prior to adjustment was $3,650. If the amount still unearned as...

The balance in Unearned Revenues prior to adjustment was $3,650. If the amount still unearned as of the end of the period is $1,900?, the adjusting entry needed would be? to:

debit Unearned Service? Revenue,

$1,750?;

credit Service? Revenue,

$1,750.

debit? Cash,

$3,650?;

credit Unearned Service? Revenue,

$3,650.

debit Service? Revenue,

$1,750?;

credit Unearned Service? Revenue,

$1,750.

debit Unearned Service? Revenue,

$1,900?;

credit Service? Revenue,

$1,900.

Of the? following, which is NOT classified as an investing activity on the Statement of Cash? Flows?

Selling goods and services

Collecting the principal on loans

Purchasing land

Sale of equipment for cash

38) The balance in Unearned Revenues prior to adjustment was $3,650. If the amount still unearned as of the end of the period is $1,900, the adjusting entry needed would be to: A. debit Unearned Service Revenue, $1,750; credit Service Revenue, $1,750. B. debit Cash, $3,650; credit Unearned Service Revenue, $3,650. C. debit Service Revenue, $1,750; credit Unearned Service Revenue, $1,750. D. debit Unearned Service Revenue, $1,900; credit Service Revenue, $1,900. 39) Of the following, which is NOT classified as an investing activity on the Statement of Cash Flows? A. Selling goods and services B. Collecting the principal on loans C. Purchasing land D. Sale of equipment for cash

Solutions

Expert Solution

The adjusting entry would be A. –

Date	Account Titles and Explanation	Ref. No.	Debit	Credit
	Unearned Service Revenue		$1,750
	Service Revenue			$1,750
	(To recognize service revenue earned during the period; 3,750 - 1,900 = 1,750)

Activity not classified as investing activity on the statement of cash flows is A.

Selling of goods and service.

Explanation: Selling of goods and service activity relates to operating activity, as the same indicates conduct of business. Selling of goods and service activity is the prime purpose for the which the entity is formed and hence, the activity is classified as operating activity and not investing activity.

Among other options, collecting principal on loans, purchasing land and sale of equipment for cash, all are classified as investing activities.

Collecting principal on loan indicate extending loans at some rate of interest, where cash is invested (loaned) and interest is earned.

Purchasing of land, cash is used to acquire long term asset, the benefit of which is spread across several years.

Sale of equipment, indicates sale of fixed asset, which has been acquired and put to use. Fixed assets need initial investment and the benefit is spread across several years. Hence, the purchase and sale of fixed assets is classified as investing activity.

ekkarill92 answered 1 year ago

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