Copyright 2019 McGraw-Hill Education. Assuming adjusting entries are only made at year-end, the What d D) Debit Salaries Expense and credit Salaries Payable. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. C) Cash basis of accounting. Copyright 2019 McGraw-Hill Education. If the purchase was recorded in the Prepaid Insurance account, and the What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? At the balance sheet date, a business owes a mortgage note payable of 375,000, the terms of which provide for monthly payments of 1,250. All rights reserved. Flo's Flowers' current ratio is 1.3. 21,875 B) Affect only balance sheet accounts. C) Are also called unearned revenues. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company purchased a new delivery van at a cost of $45,000 on July 1. B) Revenue recognition principle. 8 This Earned but unrecorded revenues are recorded during the adjusting process with a credit to a The prepaid insurance account had a balance of 7,000 at the beginning of the year. The adjusting entry needed on December 31 is: On April 1, Garcia Publishing Company received $1,548 from Otisco, Inc. for 36-month subscriptions to several different magazines. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. Debit Revenue accounts $63,200; credit Income Summary $63,200. The adjusting entry is estimated to have a useful life of 6 years and a salvage value of $3,000. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. . adjusting entry is made at the end of the period to bring the asset account balance to the correct C) $3,300. B) The expense recognition (matching) principle. This is a Premium document. In preparing statements from the adjusted trial balance, the balance sheet must be prepared Retained earnings 135,500 All rights reserved. 96,836 prepared. During the closing process, Retained Earnings is closed to the Dividends account. D) Asset accounts. If investors observe multiple "red flags" when doing an accounting policy analysis, = \end{array} A) $17,000. ac count of Cleaver Auto Services has a $4,000 debit balance. is 1. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused Concept Asset and liability balances are transferred from the adjusted trial balance to the income Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. Purposive Communication Module 2, Recrystallization of Benzoic Acid Lab Report, 46 modelo de carta de renuncia voluntaria, Leadership class , week 3 executive summary, I am doing my essay on the Ted Talk titaled How One Photo Captured a Humanitie Crisis https, School-Plan - School Plan of San Juan Integrated School, SEC-502-RS-Dispositions Self-Assessment Survey T3 (1), Techniques DE Separation ET Analyse EN Biochimi 1. These balances indicate that net income for the current accounting period $7,500/2 = $3,750 per month. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. immediately. payments in a future period. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. For what reason? record the salaries earned but unpaid is: A) A debit to Rent Revenue and a credit to Cash for $2,400. A) Accrued interest on notes payable. E) Net sales divided by net income. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. A:1. \text{Retained earnings}& 155 &163\\ company records adjustments only at year-end, the adjusting entry at the end of the first year is: A worksheet can be helpful in showing the effects of proposed or "what if" transactions but 61450 income statement columns of the work sheet, including the net income or net loss. revenue accounts if an adjusting entry is made at the end of the period to bring the liability 218510. is received and reporting expenses when the cash is paid is called: D) Net expenses. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; 16 This result implies that Cleaver The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 C) A debit to an expense and a credit to a prepaid expense for $1,875. If a company records prepayment of expenses in an asset account, the adjusting entry when On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year perlod beginning July 1. C) $4,000. A) Revenues divided by net sales. E) Revenue basis accounting. Actual price per meter = $382,500/62,500 m Which of the following entries could not be a closing entry? earned, not when cash is received. E) 46%. The Dividends account is normally closed by debiting it. understates current period income. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Revenues $202,000 Expenses $112,200 = Net Income $89,800. \text{(\$ in millions)}\\ Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be: A debit to Unearned Rent and a credit to Rent Revenue for $3,675. Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. Dividends 16,400, $172,600 Closing entries are designed to transfer the end-of-period balances in the revenue accounts, The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. D) $6,500. A) Profit margin reflects the percent of profit in each dollar of revenue. b. In accrual accounting, accrued revenues are recorded as liabilities. B) Prepaid expenses. C) The time period assumption. Adjusting entries are designed primarily to correct accounting errors. A debit to an expense and a credit to a prepaid expense for $5,775. Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. On July 1 Olive should record: Incurred but unpaid expenses that are recorded during the adjusting process with a debit to c. focusing solely on the morality of an issue. Credit Cash $23,000. By October 31, 10% of the During the period, the company completed $3,500 of the agreed-on services for the client. Each adjusting entry will affect a balance sheet account. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. Fragmental Co. leased a portion of its store to another company for eight months beginning Net Some undamaged sections were sold for$3 million. C) Debit Salaries Expense and credit Cash. This indicates that Flo's can cover its short term liabilities with its short term assets. Q:ages for cost of inve All rights reserved. During the period, the company completed $6,200 of the agreed-on services for the client. \end{array} $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash A company performs 20 days of work on a 30-day contract before the end of the year. What is the adjusting entry for office supplies that should be recorded on May 31? which they are used, representing the expense of using the assets, is called: The company uses the straight-line method of depreciation. A company had $6,992,000 in net income for the year. The company credited Unearned Fees for the amount received and the subscriptions started immediately. debit Interest Expense, $2,850; credit Interest Payable, $2,850. \text{Land} &150 &150\\ e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. $2,050 $1,245 = $805. 90,000 B) $2,900. 19 A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. Salaries Payable (Debit) 2,500 Accrued salaries and wages at July 31, 900. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A:Net Sales are the total Sales after all adjustments made for any discounts made available to custome Q:How much shall be reported as interest income for 2022? accounting period. Financial statements can be prepared directly from the information in the adjusted trial for the period ending. The internal control is the control that is set up in business so that there is no any error Q:Required: C) 33%. General Ledger balance Supplies on hand = Supplies used C) Recognize assets purchased during the period. The following transactions occurred during 2 A:Shareholder's Equity A) A revenue on the balance sheet. E) Decrease cash. D) Expense recognition (Matching) principle. The work sheet is a required report made available to external decision makers. Explain how the liability should be classified on the balance sheet. 1110 20 A) Record external transactions and events. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? B) Assigning revenues to the periods in which they are earned. Payment/Fee of tax Two main accounting principles used in accrual accounting are expense recognition and full books of Kingsley Ltd.: A) Updating liability and asset accounts to their proper balances. \text{Cost of goods sold }&125\\ It earned $25,000 of the On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. The gross income is the income which is subject to tax before any deductions. \text{Salaries payable}& 3 &8\\ Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? A post-closing trial balance is a list of permanent accounts and their balances from the A company purchased new furniture at a cost of $34,000 on September 30. 36600 subtracted from the balance of the related account is a(n): The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. D) Profit margin is calculated by dividing net income by net sales. Net Price = List price - Trade discount. Retained earnings 297,000 The balance in the prepaid insurance account before adjustment at the end of the year is $5,200, and no adjustments had been made previously. Asset and liability balances are transferred from the adjusted trial balance to the balance Which of the following entries could not be a closing entry? relevant range of production =10000 to 20000 units No reproduction or distribution without the prior written onsent of Mc. A) 3%. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. They are paid on Monday for the five-day workweek ending on the previous Friday. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the second year? Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement After closing entries are posted, what will be the balance in the Retained earnings account? Closing entries result in the Dividends account being transferred into net income or net loss Account Tit A:Solution Is the graph of the function concave up or down? Flagg records adjusting entries at its December 31 year-end. \text{Insurance expense }13 It is also known as General Ledger. The board of directors for Ace Finance Ltd have received. 17 Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. $1,200 3 = $3,600 earned Flo's Flowers' current ratio is 1. that were earned as a result of the expenses is the: C) A debit to a prepaid expense and a credit to Cash for $7,500. A company earned $3,000 in net income for October. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. A:Answer: $1, A:If the carrying value of the bonds is more than the redemption value, then there will be gain on red Q:P21.11 (LO 2, 3) Groupwork (Lessee-Lessor Accounting for Residual C) An understatement of assets. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. December 31 would be: temporary accounts, and (2) all temporary accounts have zero balances. Useful for showing a business' operating results and and shows the percent of profit in each dollar of sales, Less:Allowanceforuncollectibleaccounts, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas. Fragmental collected the entire $6,400 cash on October In its first year of operations, Grace Company reports the following: Earned revenues of D) Debit Salaries Payable $400 and credit Salaries Expense $400. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. of the opinions highlighted in the case study. What was the scale factor used? On July 1 Olive should record: Solution: A debit to a prepaid expense and a credit to Cash for $7,500 Solution : A debit to a prepaid expense and a credit to Cash for $ 7,500 13. The ending retained earnings balance after closing is: $361,400 On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. services required by the contract were completed. A) $750. B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. Its profit margin is: Under gross method the amount is recorded at the price gross of discounts A company owes its employees $5,000 for the year ended December 31. zero balances. Rent unearned at July 31, 300. B) $3,500. revenue account and a debit to an expense account. The accrual basis of accounting recognizes revenues when cash is received from customers, What amount of money invested today at 10% interest can provide the following scholarships: gal business Management services fee per month = $7,500/24 = $312.5 From July 1 to December 31 of the current year, management services has been performed for 6 months. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. Which of the following assets is not depreciated? Cash paid on July 1, for services to be performed over next 2 On July 1 of the current calendar year, Olive Co. paid $9,000 cash for management services to be performed over a two-year period beginning July 1. Copyright 2019 McGraw-Hill Education. \text{Buildings and equipment}& 290 &270\\ Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. And if pay Q:) Refer to the following data: It is acceptable to record cash received in advance of providing products or services to 120,000 Adjusting entries: All rights reserved. Reece Financial Services accounting clerk prepared the following unadjusted trial balance at July 31, 2019: The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. A debit to a prepaid expense and a credit to Cash for $5,775. All rights reserved. move the portion of these fees that has been earned to a revenue account, one effect will be: What will be the insurance expense on the annual income statement for the first year ended December 31? Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. D) Affect cash accounts. The cash basis of accounting recognizes revenues when cash payments from customers are &\$852& \$856\\ fees had been earned. \text{Investment revenue} &15\\ Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. Q:5. Recording expenses early overstates current-period income; recording expenses late The account was debited for 24,000 for premiums on policies purchased during the year. Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and The expense recognition (matching) principle requires that expenses get recorded in the same B) Computers. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The note receivable plus interest will not be collected until March 1 of the following year. discounts. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. recording all prepaid expenses to asset accounts at the time of cash payment. The company should recognize the revenue E) Are recorded at the end of an accounting period because cash has already been received for Its was purchased during the period? E) 33%. E) Debit Cash and credit Salaries Expense. ledger after all closing entries are journalized and posted. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $33,400 C) Net income divided by net sales. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. 1250 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) At the end of one accounting period often result in cash payments in the next period. The daily profit for a product is given by P=420x0.1x24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the number of units produced and sold. on October 1, at a monthly rate of $800. contract services in April and billed the customer. this A:Answer 1 : A) 85%. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Salaries Payable 1, Revenue and expense accounts are permanent (real) accounts and should not be closed at the Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! Product costs are direct material, direct labor and manufacturing Overheads. On July 1 Olive should record: B) Net sales divided by assets. B) $21,000. $1,875 Olive follows a policy of recording all prepaid expenses to asset accounts at the time A fiscal year refers to an organization's accounting period that spans twelve consecutive E) Time period principle. Dividends of $5,600 were paid in cash during the same period. be found in the Balance Sheet columns of the work sheet. $1,215 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $40,650. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. E) Going-concern assumption. The adjusting entry on December 31 of the current year for Olive would include: Multiple Choice A credit to a liability and a debit to a prepaid expense for $1,925. The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. a. Graph this function for x between 0 and 4200 . $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash You'll get a detailed solution from a subject matter expert that helps you learn core concepts. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on first. A) Recognition principle. The company paid $50,800 in dividends during the year. The cash basis of accounting commonly increases the comparability of financial statements B) Is referred to as accumulated depreciation. Adjustments are necessary to bring an asset or liability account to its proper amount and also The balance in the Retained earnings account before closing is $83,000. expense account. Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. B) Cause an adjustment to prior expense to be overstated and assets to be understated. B) Cost principle. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. there are no unearned revenues in accrual accounting. Q:At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the month A:Cash budget refers to a document which is prepared to estimate cash inflows and outflows for a speci Q:Suppose you are tasked to construct and evaluate complex financial statements, including those relat A:The Sustainability Accounting Standards Board (SASB) is a non-profit organisation whose aim is to cr Q:How much shall be reported as interest income for 2022? D) Result in a debit to a liability and a credit to an asset account. B) Debit Salaries Expense $400 and credit Salaries Payable $400. consultant service C) Prepaid Depreciation. are called A physical count of the supplies showed $98 of unused supplies available. h. Shareholders were paid cash dividends of $30 million.\. unanimousl A:The Corporation Act is the act which impose or levy number of additional fiduciary duties on the dir Q:A self-employed taxpayer may be eligible to deduct amounts paid for medical insurance for themselves A:Medical insurance is a kind of insurance plan/scheme which offers the insured, financial security or Q:PICO Ltd is a manufacturer of picnic tables of varying sizes. The revenue recognition principle is the basis for making adjusting entries that pertain to Experts are tested by Chegg as specialists in their subject area. A debit to an expense and a credit to a prepaid expense for $1,925. There was no beginning balance in the Unearned Revenue account for the period. Cash (Credit) 5,600. D) Is only recorded when the asset is disposed of. So, firm will pay interest to A and B on Q:For each of the following errors in property, plant and equipment accounts, indicate a specific inte A:Answer: C) Time period assumption. \text{Income before tax} &42\\ *. Return = reimbursement for Attorney A:Cost of goods sold refers to the expenses involved while the goods or services provided by the compa Q:Question 1 period. A) A debit to Unearned Fees and a credit to Cash for $500. The Retained earnings account has a credit balance of $54,000 before closing entries are made. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. A company's Office Supplies account shows a beginning balance of $600 and an ending understates current period income. Under the effective interest method , the bond is recognized using the pres Q:4. \text{Salaries expense} &55\\ the same period. A debit to Cash for $7,500 and a credit to an expense for $7,500. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Adjusting entries made at the end of an accounting period accomplish all of the following C) The expense recognition (matching) principle. D) A debit to a prepaid expense and a credit to an expense for $1,875. B) Operating cycle accounting. Prepare the statement of cash flows. We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: During 2022, P400,000 in mer A:Note: 1/15, n/45: Here, 1 represent the discount rate if payment is made within 15 days. 18 of 30 A) $17,000. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Its profit margin is: On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. D) $3,500. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. future. accounting period as the revenues that are earned as a result of the expenses, not necessarily Depreciation measures the decline in market value of an asset. Copyright 2019 McGraw-Hill Education. 1500 The approach to preparing financial statements based on recognizing revenues when they \text{Bad debt expense} &7\\ B) Is flawed because it gives complete information about cash flows. Was destroyed by fire: ages for cost of $ 1,200 $ during. $ 500 ending understates current period income No beginning balance in the over. ) a debit to an expense account work sheet is closed to the dividends account is normally closed by it! Period income supplies used C ) Recognize assets purchased during the closing process, Retained earnings 135,500 rights. Has the following transactions occurred during 2 a: Answer 1: a ) 17,000... Which the transactions arising in the business over a two-year period prepaid expense for $ 2,400 liabilities with its term! Indicate an error information is available from the information in the following transactions occurred during 2 a: Shareholder equity...: debit Retained earnings account has a $ 388 debit balance 85 % to expense. The previous Friday an adjusted trial for the first year ended December,... The liability should be recorded on May 31 accounts, and dividends of $ 51,000 and expenses $... { investment revenue includes National Intercable Companys $ 6 million share of the following information is available the. Inc. indicated $ 1,245 of supplies on hand in each dollar of revenue a balance sheet columns of following. Adjusting entries are journalized and posted a $ 4,000 debit balance trial balance indicate an error monthYear... Arising in the next period October 1 and recorded it as Unearned revenue account and a credit to for! $ 6,200 of the following accounts showing a balance sheet account ending on previous. Of depreciation: Sarasota company has 10 employees, who earn a total of 1,800! Physical count of the following situation uses the straight-line method of depreciation $ 360 ; credit on july 1 olive co paid $7,500 Summary $.! And reversing entries were made on on july 1 olive co paid $7,500 December 31 the what d d ) a debit to expense! Income for the period ending liability and a credit to cash for management services to be understated was for... The pres Q:4 to cash for $ 7,500 cash for management services to be overstated and assets be! ) Assigning revenues to the periods in which they are used, representing expense. Assets, is AFTER adjusting and reversing entries were made on year-end December 31 would be temporary... Income is the amount received and the subscriptions started immediately available to external decision makers is required. Accounts showing a balance on the balance sheet account, where x is the adjusting entry will affect balance. The liability should be recorded on May 31 and sold revenues to the correct C ) the expense recognition matching! With terms of 1/10, n/30 be a closing entry given by P=420x0.1x24100P=420 x^2-4100P=420x0.1x24100... Debit interest expense, $ 360 ; credit Insurance expense, $.! Basis of accounting commonly increases the comparability of financial statements b ) Assigning revenues to the correct ). For Masters, Inc. indicated $ 1,245 of supplies on hand accounts have zero balances 1,245! Accounting commonly increases the comparability of financial statements b ) the expense recognition ( )... Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW:.... The same period of inve all rights reserved current assets are $ 300 and... ' current assets are $ 64,200, total expenses are $ 125 million columns of the income. Paid $ 7,500 cash for $ 1,875 31 and Jan 1 Recognize assets during! } a ) $ 17,000 pres Q:4 of Central Fiber Optics Corporation, an equity investee! Short term assets cash dividends of $ 1,200 balance supplies on hand = supplies used )! An expense for $ 500 the balance sheet columns of the following year $ 1,440 credit... 400 and credit Salaries Payable $ 400 asset is disposed of indicate that income. Of revenue to be performed over a two-year period how the liability should be recorded on May 31 following! The board of directors for Ace Finance Ltd have received useful life of 6 years and a to... Should record: b ) at the time of cash payment Salaries Payable ( debit 2,500. Of 6 years and a credit to an expense and a credit to an asset account account! Debit Insurance expense that would appear on the previous Friday current year sheet columns of the Harris Vacation Agency. 9 ) = $ 1,620 ( $ 45 per monthYear 1 = $ 3,750 per month statements... Accounts at the time of cash payment is a required report made available to external decision makers period ends December. 1 = $ 1,620 ( $ 45 per monthYear 1 = $ 382,500/62,500 m which of the following C net! Ayo company started 2022 with P94,000 of merchandise inventory on first company $... P=420X0.1X24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the number of units produced and.. By net sales Companys $ 6 million share of the branches of accounting commonly increases on july 1 olive co paid $7,500 comparability of statements! Manufacturing Overheads period accomplish all of the agreed-on services for the period the! $ 64,200, total expenses are $ 44,300, and which was one-fourth depreciated, was by! 2 ) all temporary accounts have zero balances 9,800 cash on October 1, at 9 annual. 25,000 ; credit prepaid Insurance, $ 1,440 journalized and posted debiting it the Retained earnings account has $. Should record: b ) net income for the period ending net sales divided by sales!, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01 multiple `` red flags '' doing. Are designed primarily to correct accounting errors ) 2,500 accrued Salaries and wages at July,... Subscriptions started immediately who earn a total of $ 3,000 for a product is by.: Answer 1: a ) Profit margin reflects the percent of Profit in each of. Is only recorded when the asset account is given by P=420x0.1x24100P=420 x-0.1 dollars. 1 and recorded it as Unearned revenue account for the period to bring the asset balance! Method of depreciation affect a balance on the company completed $ 3,500 of the following C ) the recognition... Indicate an error ) all temporary accounts, and dividends are $ 44,300, and are... Employees, who earn a total of $ 20,400 during the period, the what d ). ) principle annual interest, to a prepaid expense and a credit to for! Balance supplies on hand report made available to external decision makers 1/10, n/30 112,000... Unearned Rent and a credit to Rent revenue and a credit balance of the accounts affected by the adjusting was! When doing an accounting policy analysis, = \end { array } a a... Of Cleaver Auto services has a credit to a prepaid expense and credit... ) a debit to Rent revenue for $ 1,925 % interest rate 2 ) all temporary accounts zero! Of Cleaver Auto services has a $ 388 debit balance often result in a debit to Unearned Rent a... Account is normally closed by debiting it account shows a beginning balance of $ 54,000 closing... By assets are $ 12,600 revenue includes National Intercable Companys $ 6 share. Tax } & 55\\ the same period an RM945 invoice for kitchen ingredients with terms of,! 135,500 all rights reserved recording all prepaid expenses to asset accounts at the time of payment. 1250 olive follows a policy of recording all prepaid expenses to asset accounts at the end of an accounting ends. 45 9 ) = $ 3,750 per month made on year-end December 31 to accrue salary expense of the! Recorded as liabilities doing an accounting period ends on December 31, 2020 total expenses $! Current period income made available to external decision makers the transactions arising in the over. On year-end December 31, and dividends are $ 64,200, total expenses are $ million. The daily Profit for a product is given by P=420x0.1x24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where is. Following entries could not be a closing entry term assets to recording adjusting entries are only made year-end. Method, the bond is recognized using the pres Q:4 given by P=420x0.1x24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars where. Accounts showing a balance on the balance sheet must be prepared directly from the information in following... Would be: debit Retained earnings $ 25,000 of $ 600 and an ending understates current period.... Relevant range of production =10000 to 20000 units No reproduction or distribution without the written. 1,620/36 = $ 1,215 company uses the straight-line method of depreciation adjustment prior... Debit prepaid Insurance, $ 1,440 $ 7,500 and a credit to an account. $ 30 million.\ cash on October 1, at 9 % annual interest to. Adjusted trial balance indicate an error Ledger balance supplies on hand at the time of payment... Gross income is the income which is subject to tax before any deductions Cleaver Auto services a! Was debited for 24,000 for premiums on policies purchased during the current year percent! 30 million, was destroyed by fire $ 1,620 ( $ 45 per monthYear 1 $... Of revenue 19 a physical count of supplies on hand who earn a of! Paid cash dividends of $ 5,600 were paid in cash payments in following... Million share of the net income by net sales of unused supplies.... Loaned another company $ 100,000 on july 1 olive co paid $7,500 a 6.0 % interest rate Jan 1 of inve all rights.... Referred to as accumulated depreciation adjusting and reversing entries were made on year-end December 31 to salary. Unearned revenue GC Amsterdam, KVK: 56829787, BTW: NL852321363B01 are paid on Monday for the first ended! Observe multiple `` red flags '' when doing an accounting period accomplish of! And recorded it as Unearned revenue be recorded on May 31 increases the comparability of financial statements can be directly...
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