19.5 - Recording prepaid revenue

1. 19.5 RECORDING PREPAID
REVENUE

2. © Michael Allison, Trinity Grammar School.
Author’s 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. © Michael Allison, Trinity Grammar School.
Author’s 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. © Michael Allison, Trinity Grammar School.
Author’s 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. © Michael Allison, Trinity Grammar School.
Author’s 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. © Michael Allison, Trinity Grammar School.
Author’s 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. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 The firm’s 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. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
TASK
In-class Homework
SQ5 X
Ex19.1 X
Ex19.2 X
Ex19.3 X