Design Services Inc, an E/A firm in the foothills of the Smoky Mountains, uses the accrual basis of accounting and recognizes revenue at the time it renders services and uses the percentage-of-completion method for recognizing revenue on long-term contracts.

Indicate for each transaction listed below the amount of revenue or expense, if any, recognized in September, October, or November:

1.     The firm collects fees from a client in the amount of $10,000 in September for billings outstanding at August 31^st.

2.     The firm collects an advance from a client in the amount of $25,000 in October for professional services which will not start until December.

3.     The firm begins work on a project on November 1st with a $100,000 contract.  Fifty percent of the work is completed by November 30^th.  The remainder of the work is completed in December.  No billings are sent to the client until the project is 100% complete.

4.     The firm purchases a copier/printer to be used for office and marketing support services on October 1^st, at which time the equipment is placed in service although the supplier is not requiring payment until November.  The cost of the equipment was $2,000.  The cost is depreciated (written off) over five years at a rate of $400 per year.

5.     The firm pays $5,000 in September for a trainer to provide a workshop onsite in late October.

6.     The firm reimburses a Project Manager on September 25th in the amount of $800 of which $250 was for non-project-related business travel expenses in October and $550 was for the registration of a local professional conference scheduled in November.