1. Prepare a journal entries for each transaction.
2. Using the journal entries as a guide, show whether each transaction would be handled as a revenue or an expense using both the accrual and cash by completing the table provided.
3. After completing the table, calculate the amount of net income or net loss for Jacks catering under the accrual and cash basis for May.
4. Considering your result? Which method gives the best picture of the true earning of Jack catering? Why
1. Prepaid rent for three months, $1200.00
2. Paid electricity expense, $400
3. Received cash for meals served to customers, $2300
4. Paid cash for kitchen equipment $4500
5. Served a banquet on account, $3200
6. Made the adjusting entry for rent (from May 1st)
7. Accrued salary expense $1700
8. Recorded depreciation for May on kitchen equipment, $75