1. Create journal entries for each transaction.
2. Using the journal entries as a guide, show whether every transaction would be handled as revenue or an expense using both the cash and accrual by completing the table provided.
3. After completing the table, determine the amount of net income or net loss for Jacks catering under the cash and accrual basis for May.
4. Considering your result? Which method provides 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