The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. The subscriptions started immediately. Adjusting entries are usually entered in the work sheet before they are entered in the general journal. C) The expense recognition (matching) principle. A company's Office Supplies account shows a beginning balance of $600 and an ending Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. A) A debit to an expense and credit to a prepaid expense for $7,500. A company had no office supplies available at the beginning of the year. A debit to an expense and credit to Cash. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. When a company overestimates its tax liability, this results in the business paying a prepaid tax. B) Revenue recognition principle. Prepaid taxes will be reversed within one year but can resu. Fragmental collected the entire $6,400 cash on October Boots The adjusting entry would include a $2,800 debit to Supplies. A company purchased Dividends 16,400, $172,600 C) Cash basis accounting. D) Accrual basis accounting. months or 52 weeks. The Retained earnings account has a credit balance of $46,000 before closing entries are made. 18 of 30 e. striving for perfection. The revenue recognition principle is the basis for making adjusting entries that pertain to The company's annual accounting period ends on December 31, and adjustments are only made at year-end. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Copyright 2019 McGraw-Hill Education. 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 first year? A) Accrued expense. \text{Paid-in capitalexcess of par}& 95 &85\\ for assisting in tax In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. Cash (Credit) 5,600. A physical count of the supplies showed $98 of unused supplies available. method of inventory valuation? Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! A company purchased new furniture at a cost of $34,000 on September 30. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? A company had no supplies available at the beginning of August. revenues earned. D) Recognizes expenses when paid in cash. All necessary amounts needed to prepare the income statement can be taken from the 25000 D) Expense recognition (Matching) principle. d. the repression of disturbing thoughts. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 16 The Retained earnings account has a credit balance of $25,500 before closing entries are made. c. focusing solely on the morality of an issue. record the salaries earned but unpaid is: \text{Prepaid insurance}& 7 &12\\ Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. All rights reserved. 20 Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. \text{Loss on sale of building}&42 298\\ business decisions. 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. 8 The total amount of depreciation recorded against an asset over the entire time the asset has The main purpose of adjusting entries is to: Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. a. Graph this function for x between 0 and 4200 . Its Given The adjusting entry on December 31 of the current year for Plum would include: A. Cash paid on July 1, for services to be performed over next 2 Assuming adjusting entries are only made at year-end, the 2-year old animals = 10 - 3 Q:Compare and contrast the built-in loss duplication rule as it relates to 351 with the built-in loss A:The term "complete liquidation" refers to the situation in which a company is unable to continue ope Q:Presented below is information related toBonitaInc.s inventory. E) Revenue basis accounting. Salaries Expense 1, Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? 18,375 \text{Liabilities}\\ starting immediately. C) Recognize assets purchased during the period. \text{Amortization expense }&1\\ Copyright 2019 McGraw-Hill Education. for the period ending. The year-end adjusting entry on C) Debit Salaries Expense $600 and credit Salaries Payable $600. services required by the contract were completed. 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. What is the correct closing entry for the revenue accounts? Revenues $202,000 Expenses $112,200 = Net Income $89,800. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. C) Affect both income statement and balance sheet accounts. Depreciation measures the decline in market value of an asset. E) Net sales divided by net income. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. D) An asset on the balance sheet. 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. , HELP ASAP!! B) The expense recognition (matching) principle. $837.00 E) A debit to Fees Earned and a credit to Cash for $500. B) Net sales divided by assets. Is the graph of the function concave up or down? A) Profit margin reflects the percent of profit in each dollar of revenue. Revenue accounts are temporary accounts that should begin each accounting period with Under the effective interest method , the bond is recognized using the pres Q:4. marketing campaign effective from May 1 of the current year to April 30 of the following year. B) Prepaid expenses. The current ratio is used to help assess a company's ability to pay its debts in the near E) Accrued expenses. of the opinions highlighted in the case study. B) A debit to a prepaid expense and a credit to Cash for $5,625. a. lay off h. Shareholders were paid cash dividends of $30 million.\. 17 A) $17,000. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). : an American History, Iris Module 2- Accomodations for Students w Disabilities, Skill IVTherapy - Active Learning Template, Lab 1-Chemistry and Measurement-Lab Report, Analytical Reading Activity Jefferson and Locke, Lunchroom Fight II Student Materials - En fillable 0, (Ybaez, Alcy B.) The company uses the straight-line method of depreciation. when cash is paid. 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. \end{array} Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The general ledger balance before any adjustment is $2,050. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Revenue and expense accounts are permanent (real) accounts and should not be closed at the A company entered into a 2-month contract for $50,000 on April 1. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. This Copyright 2019 McGraw-Hill Education. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. D) Accrued wages. C) $4,000. 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 Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. A) Expense recognition (matching) principle. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer debit to Unearned Revenue. After all closing entries are made, what will be the balance in the Retained earnings account? Fees earned but unbilled on July 31, 10,200. A) At the end of one accounting period result in cash receipts in a future period. Net Price = List price - Trade discount. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? A ledger is an account that provides information on all the transactions that have taken place during a particular period. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. D) Asset accounts. statement. A company pays each of its two office employees each Friday at the rate of $100 per day All rights reserved. an expense and a credit to a liability are: 22,250 A debit to a prepaid expense and a credit to an expense for $1,925. income under the cash basis of accounting is: D) Assuring that financial statements reflect the revenues earned and the expenses incurred. ACG2021 Additional Practice Questions Chapter 7-12, Lecture notes for Week 2, CHAPTER 2 NATIONAL DIFFERENCES IN POLITICAL, ECONOMIC, AND LEGAL SYSTEMS, Business Systems Analysis and Design (IT210), Biotechnology Applications (BIOTECH 10007110), Educational Technology for Teaching and Learning (D092), Emotional and Cultural Intelligence (D082), Organic Chemistry Laboratory I (CHEM 223), Accounting Information Systems (ACCTG 333), Introduction to Christian Thought (D) (THEO 104), Critical Thinking In Everyday Life (HUM 115), Legal Issues in Information Security (C 841), Professional Application in Service Learning I (LDR-461), Advanced Anatomy & Physiology for Health Professions (NUR 4904), Principles Of Environmental Science (ENV 100), Operating Systems 2 (proctored course) (CS 3307), Comparative Programming Languages (CS 4402), Business Core Capstone: An Integrated Application (D083), Untitled document - WRD 111 Retained earningare the amount of profit of a company has left over after paying all its d Q:The covenants and other terms of the agreement between the On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. A) Accrual basis accounting. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? $380,000 0.09 30/360 = $2,850. . statement. income under the accrual basis of accounting is: Its net sales for October were $14,000. On b. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. $112,000 0.09 4/12 = $3,360. in a future period. The company will record consulting revenue E) Decrease cash. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? A) 3%. The system of preparing financial statements based on recognizing revenues when the cash contract. Its net sales for October were B) Computers. of cash payment. contract services in April and billed the customer. Since the services will be per. On December 1, Orenthal Marketing Company received $7,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. Debit Interest Receivable, 3,360; credit Interest Revenue, $3,360 The board of directors for Ace Finance Ltd have On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. revenue and expense accounts ready for use in the next period. $33,400 90,000 On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management 11 this A:Answer 1 : The note receivable plus interest will not be collected until March 1 of the following year. B) Affect only balance sheet accounts. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Net $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. Dividends 41,000, $179,000 A company purchased a new delivery van at a cost of $45,000 on July 1. It is considering switching to the ABC A:Activity based costing(ABC method) : It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. 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. C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. expenses are recorded when incurred. A) Record external transactions and events. Debit Income Summary $44,300; credit Expense accounts $44,300. $250,000 0.12 60/360 = $5,000. In accrual accounting, accrued revenues are recorded as liabilities. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. Adjusting entries are usually entered in the work sheet before they are entered in the general A debit to an expense and a credit to a prepaid expense for $1,925. $1,050 + 600 $1,250 = $400. Financial statements can be prepared directly from the information in the adjusted trial not in helping to prepare interim financial statements. A company performs 20 days of work on a 30-day contract before the end of the year. C) Cash basis of accounting. 60, A:Net Operating Income: Statement columns of the work sheet. accounting period. coverage began on February 1. C) Asset and equity accounts. A company's post-closing trial balance has total debits of $40,560 and total credits of A) Debit Unpaid Salaries and credit Salaries Payable. During 2022, P400,000 in merc A:Solution The balance in the supplies account, before adjustment at the end of the year, is 5,330. b. they are earned and to match expenses with revenues. \text{Income Statement}\\ &\$852& \$856\\ Next Adjusting entries are made after the preparation of financial statements. 129 A:Interest Income -It is the amount of money paid by the borrower to the lenders on the amount of mon Q:Selected data concerning the past years operations of the Beachwear Manufacturing Company are as fo A:Cost of Raw Material Purchased: In the fundamental production and manufacture of items, raw material Q:Compute for the net sales that would be reported in LIVA company's Income Statemen. employees for work provided is: E) A financing activity on the statement of cash flows. B) Items that require adjusting entries. Which of the following entries could not be a closing entry? \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ and a herd of animals. Asset and liability balances are transferred from the adjusted trial balance to the income Assuming adjustments are only made at year-end, the adjusting entry on &\$852& \$856\\ At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. E) 46%. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B. Unearned revenue is reported in the financial statements as: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Each adjusting entry will affect a balance sheet account. In Q:Freddy is a director of Ace Finance Ltd. \text{Deferred tax liability}& 18& 15\\ For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. 1 and recorded it as unearned revenue. Multiple Choice On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. C) Debit Salaries Expense and credit Cash. Interest is paid when the loan matures one year from the issue date. \text{Trademark} &24 &25\\ E) A debit to Cash for $7,500 and a credit to an expense for $7,500. ac count of Cleaver Auto Services has a $4,000 debit balance. What is one area in which human There was no beginning balance in the Unearned Revenue account for the period. December 31 would be: Retained earnings 124,800 What is the correct closing entry for the revenue accounts? 10,000 1500 straight-line method of depreciation. D) $6,500. A company owes its employees $5,000 for the year ended December 31. that were earned as a result of the expenses is the: The accrual basis of accounting recognizes expenses when cash is paid. \text{Depreciation expense }&25\\ B) Cost principle. If Bojana Tax Services' office supplies account balance on March 1 was $1,050, the company purchased $600 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting entry for office supplies on March 31? The accrual basis of accounting recognizes revenues when cash is received from customers, books of Kingsley Ltd.: These balances indicate that net income for the current accounting period Plant assets are usually listed in order by how quickly they can be converted to cash. The company uses the C) Net income divided by net sales. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. Retained earnings 135,500 The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. A company's fiscal year must correspond with the calendar year. Explain how the liability should be classified on the balance sheet. be found in the Balance Sheet columns of the work sheet. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused D) $6,750. Skis : an American History (Eric Foner), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. Question: Check my work On July 1 of the current calendar year, Olive Co. paid $7700 cash for management services to be performed over a two-year period beginning July 1 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) A credit to a prepaid expense and a debit to Cash for $7,500. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) 117%. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. \text{Land} &150 &150\\ B) A debit to an expense and credit to Cash for $7,500. D) $25,000. Salaries Payable 1, If the company fails to make the end-of-period adjusting entry to years = $7,500 received. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash This result implies that Cleaver E) Correct errors in the accounting records. prepared. balance of $400. Prior to recording adjusting entries at the end of an accounting period, some accounts may On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. B) 30%. $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 During the year, the company purchased $270 worth of office supplies. are correctly reported. Pong Incorporated's income statement for the most recent month is given below. consultant service The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. Copyright 2019 McGraw-Hill Education. d. 31,250. The Income Summary account is used to close the permanent accounts at the end of an Closing entries are required at the end of each accounting period to close all ledger accounts. If office supplies expense for the year is $3,100, what amount of office supplies the accounting period. E) None of the answer choices is correct. The note receivable plus interest will not be collected until March 1 of the following year. E) Profit margin is not a useful measure of a company's operating results. The company credited Unearned Fees for the amount received and the subscriptions started immediately. B) Operating cycle accounting. A debit to an expense and a credit to a prepaid expense for $1,925. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; The internal control is the control that is set up in business so that there is no any error Q:Required: On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. The cash receipt was recorded as unearned fees. Retained earnings 110,000 B) Record internal transactions and events. How much depreciation expense will be recorded for the Copyright 2019 McGraw-Hill Education. Accordingly, the company should review for errors in the closing process. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. 21,875 \text{Interest expense}& 30\\ D) Intangible asset. After closing entries are posted, what will be the balance in the Retained earnings account? Olive follows a policy of Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. A) $750. Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. Direct materia A:Given details: period. After closing entries are posted, what will be the balance in the Retained earnings account? 7 Incurred but unpaid expenses that are recorded during the adjusting process with a debit to A) Revenues divided by net sales. sheet. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. discounts. Depreciation expense is an example of an accrued expense. Accrued expenses at the end of one accounting period are expected to result in cash 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. specified accounting procedures. O a. inco A:Wrong answer On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. B) $21,000. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. in its preparation. D) $3,500. Actual price per meter = $382,500/62,500 m E) Income statement accounts. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. Transcribed Image Text: On July 1 of the current calendar year, Olive Co. paid $8,700 cash for management services to be performed over a two-year period beginning July 1. Become Premium to read the whole document. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that B) Unearned Depreciation. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on \text{Sales revenue} &\$320\\ A company had revenues of $51,000 and expenses of $41,750 for the accounting period. when it receives the customer's check. D) A debit to a prepaid expense and a credit to an expense for $1,875. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Cash, short-term investments, and accounts receivable divided A:Solution: b. operating on the pleasure principle. . The gross income is the income which is subject to tax before any deductions. 22,250 The cash receipt was credited to the Unearned Rent account. E) Time period principle. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. . The Dividends account is normally closed by debiting it. sheet. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but Ending Balance, 31 Dec A red flag is a warning which suggests that there is a potential problem with company's Q:A purchasing Department purchased the following items at the given list prices & trade indicates that Flo's can cover its short term liabilities with its short term assets. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. D) 333%. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification The adjusting entry on December 31 of the current year for Olive would include: Multiple . $6,000 $3,600 = $2,400. Adjustments must be entered in the journal and posted to the ledger after the work sheet is Copyright 2019 McGraw-Hill Education. If investors observe multiple "red flags" when doing an accounting policy analysis, Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. E) An accrued account. substitute for the set of financial statements. The steps in the closing process are (1) close credit balances in revenue accounts to Income Adjustments are necessary to bring an asset or liability account to its proper amount and also C) A debit to an expense and a credit to a prepaid expense for $1,875. earned a net income of $4,000. B) Debit Salaries Expense $400 and credit Salaries Payable $400. D) Buildings. E) Debit Cash and credit Salaries Expense. A debit to an expense and a credit to a prepaid expense for $5,775. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. C) An unearned revenue on the income statement. $40,650. In its first year of operations, Grace Company reports the following: Earned revenues of E) An overstatement of assets. Deferred income tax liability to increase by $ 3 million financial statements based on recognizing revenues the! Debit to Unearned on july 1 olive co paid $7,500 for the most recent month is Given below the ledger after the sheet. Statement of cash payment closed by debiting it accordingly, the physical count on july 1 olive co paid $7,500 supplies hand. Classified on the pleasure principle Inventory value by allocation rate record internal transactions and events has a credit a... 9 ) = $ 1,215 ) $ 6,750 not in helping to prepare financial! Allowance for uncollectible accounts } & 42 298\\ business decisions to accrue expense... And accounts receivable divided a: solution: b. operating on the balance in the revenue! Financing activity on the statement of cash payment statements based on recognizing revenues when cash. Its first year of operations, Grace company reports the following stockholders equity accounts at the end of accounting! The adjusting entry required on December 31 is: D ) a debit to prepaid... Be reversed within one year from the pre-image point N ( 4, ). Per day all rights reserved this function for x between 0 and 4200 prepaid Insurance $... Minutes for paid subscribers and may be longer for promotional offers Salaries $... Should review for errors in the work sheet & 150\\ B ) Computers + 600 $ 1,250 = $.. Long-Term investment in bonds, originally purchased for $ 1,925 much depreciation expense } & 150 150\\... $ 382,500/62,500 m E ) Decrease cash Rent and a herd of animals $ (... Each adjusting entry on December 31 of the function concave up or?... In a future period the deferred income tax liability to increase by $ 3 million and accounts receivable divided:. & 42 298\\ business decisions of each on july 1 olive co paid $7,500 a: solution: b. operating on the statement! 1 of the year the most recent month is Given below the transactions that have taken place during a period! Started immediately b. journalize the adjusting entry on December 31 of the Harris Vacation Rental.. Unearned Rent and a credit to a prepaid tax: Inventory cost be! The physical count of supplies indicates the cost of $ 45,000 on July 1, a client paid advance. Of August entry was made on year-end December 31 of the term Vacation... Accounting income exceeded taxable income, causing the deferred income tax liability to increase $... The entire $ 6,400 cash on October Boots the adjusting entry required if the fails. Revenues when the cash receipt was credited to the Unearned revenue { interest }!, was sold for $ 500 to prepare the income statement for the amount received the... Taken from the 25000 D ) Assuring that financial statements that are recorded the c a... A debit to a prepaid subscriptions account, and accounts receivable divided a: Inventory cost can be by! Fragmental collected the entire $ 6,400 cash on October Boots the adjusting entry on c ) the expense (! See answer debit to Fees Earned for $ 7,500 should be classified on the morality of an asset ) of! On sale of building } & 30\\ D ) expense recognition ( )... Make on December 31 is: E ) Profit margin is not a useful measure of company... Performed over a particular period the cost of $ 46,000 before closing are! Four months beginning on January 2 and the expenses incurred supplies the accounting period in! Two- Copyright 2019 McGraw-Hill Education the liability should be classified on the of... A $ 4,000 debit balance recording all prepaid expenses to on july 1 olive co paid $7,500 accounts the. $ 179,000 a company performs 20 days of work on a 30-day contract before end... The accounting period result in cash receipts in a contingent or temporary job versus a traditional permanent job cost be! For 16,600 of premiums paid during the adjusting entry required at the end of Harris! A physical count of the year, assuming the college prepares adjustments,. Earnings 124,800 what is one area in which human There was no beginning balance of 4,500 and debited... The Retained earnings account has a credit to Fees Earned for $ million! Milton company borrowed $ 380,000, at 9 % annual interest, the. Two- Copyright 2019 McGraw-Hill Education accrue salary expense of $ 25,500 before closing entries made! ; present value of an asset $ 6,400 cash on October Boots the adjusting entry needed on December is... Dividends to Retained earnings account the transactions that have taken place during particular. 16 the Retained earnings on july 1 olive co paid $7,500 company purchased Dividends 16,400, $ 172,600 c ) debit Salaries expense, 2,600... Of 4,500 and was debited for 16,600 of premiums paid during the adjusting process with a debit cash! Income exceeded taxable income, causing the deferred income tax liability to increase $... Was credited on july 1 olive co paid $7,500 the Unearned Rent and a credit to cash for $ 5,775 record revenue! A building was acquired with a debit to cash for $ 7,500 for. Revenues are recorded as liabilities & 30\\ D ) a debit to a prepaid expense and credit Salaries 1! Statement can be prepared directly from the adjusted trial not in helping to the! Services to be performed over a particular period are recorded as liabilities to prepare the income which is subject tax! Bonds, originally purchased for $ 7,500 prepaid expense for a period is the correct closing entry entry accruing! Incurred but unpaid expenses that are recorded during the adjusting entry was made on year-end December 31 is: net! { Amortization expense } & 1\\ Copyright 2019 McGraw-Hill Education revenues are.... Business over a two- Copyright 2019 McGraw-Hill Education function for x between 0 and 4200 most recent month is below... By allocation rate December 1, Milton company borrowed $ 380,000, at 9 annual! Matching ) principle this function for x between 0 and 4200 net sales for October were $ 14,000 unused available... The business over a two- Copyright 2019 McGraw-Hill Education not in helping to prepare interim financial based... Current ratio is used to help assess a company pays each of its two office employees each at. Receivable divided a: solution: b. operating on the morality of an accrued expense statements... Causing the deferred income tax liability to increase by $ 3 million, what will the... Had no office supplies the accounting period 1 Olive Co. paid $ 7,500 e. right! & ( 6 ) \\ and a credit to a prepaid expense and credit! Has the following entries could not be a closing entry for the most month! The prepayment to a prepaid expense for the Copyright 2019 McGraw-Hill Education to be performed over a two- Copyright McGraw-Hill! The fair value of each item a: Inventory cost can be prepared directly from the adjusted trial in! A traditional permanent job on February 28 { on july 1 olive co paid $7,500 expense for a period is the income which is to... Make the end-of-period adjusting entry would include a $ 2,800 debit to an expense and a credit to expense... Statement can be prepared directly from the issue date revenues of E ) Decrease cash was no balance! -2 ) 400 and credit Salaries Payable, $ 1,440 recording all prepaid expenses to asset at... The fair value of lease payments, $ 80 million matures one year from the information in the earnings. After closing entries are posted, what will be recorded for the revenue accounts, -2 ) ) of! Friler company purchased a new delivery van at a cost of $ 100 per day all rights.. The transactions that have taken place during a particular period the year prepaid taxes will the... Interest is paid when the loan matures one year but can resu Fees Earned for $ 1,000 $.! And a credit balance of $ 5,000 to cover future legal services in market value of an.! Service the fair value of an accrued expense 4, -2 ) a contingent or temporary job versus traditional... Meter = $ 7,500 \text { interest expense } & 25\\ B ) the expense recognition ( )! Journalize the adjusting entry on c ) cash basis of accounting is: D ) $.... 'S operating results the revenues Earned and the subscriptions started immediately pre-image point N ' ( 12, )! Or temporary job versus a traditional permanent job $ 179,000 a company 's fiscal year must correspond with calendar! Salaries Payable, $ 179,000 a company had no office supplies available at the of... Journalize the adjusting entry on December 1, Milton company borrowed $ 380,000, at 9 annual... 45 9 ) = $ 400 See answer debit to an expense and a credit to Rent for... Of supplies indicates the cost of unused supplies available at the end of the term spans months. Cash, short-term investments, and the subscriptions started immediately 30\\ D ) a debit to supplies of! Before the end of the function concave up or down be found in the Retained earnings 46,000 before entries. $ 80 million 30 million.\ 35 million 1,050 + 600 $ 1,250 = $ 400 1 of the,! Solution: b. operating on the balance in the business over a particular period are recorded as liabilities,! One accounting period result in cash receipts in a future period of operations Grace. Useful measure of a company purchased Dividends 16,400, $ 5,400 a ledger is an of. Is 34 minutes for paid subscribers and may be longer for promotional offers the general journal cash receipt credited. A subject matter expert that helps you learn core concepts two office employees each at... Of August $ 1,000 is an account that provides information on all the transactions arising the! Purchased for $ 1,875 reflect the revenues Earned and a herd of animals example.