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Amounts of Ritz Manor Adjustments Essay

I)         Adjusting Entries of Ritz Manor

S.No
PARTICULARS
P/R
DEBIT
CREDIT
a)
Unearned Rental Revenue

$220

Rent Revenue

$220

(To adjust Rent Revenue for One Night in Advance)

b)
Rent Receivable

$2,808

Rent Revenue

$2,808

(To adjust the 30% refreshment sales that earned in the first quarter) * (720 x 13 = 9,360 x 30% =2,808)

*Assume 13 weeks in one quarter

II)        Amounts of Ritz Manor Adjustments

a)                  Rental revenue is adjusted for $220 because the amount is paid in advance by customers to the Ritz Manor, which is initially unearned, but after being earned it is part of the rental revenue account. This shows the effect that Ritz Manor’s liability is waived off.

b)                 $2,808 is the amount which is duly entitled to be received by Ritz Manor from Vendalite as per contract terms.Average weekly income is $720 and there are 13 weeks in one quarter approx.Ritz Manor is entitled only 30% of income.               720 x 13 = 9,360 x 30% =2,808

III)      Accounts Affected

Unearned Rental Revenue                Not Effected

Rental revenue                                   Not Effected

Rent Receivable                                Not Effected

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