The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a There was no beginning balance in the Unearned Revenue account for the period. \text{Long-term investment}& 66 &90\\ Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the Direct material used A:Solution: 11 The accrual basis of accounting recognizes revenues when cash is received from customers, Thus in collateral Q:AJUMA Farms operates a farm with various plants 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 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. Depreciation of equipment for the year, 2,800. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. *Response times may vary by subject and question complexity. All rights reserved. D) An asset on the balance sheet. A:Gross Income -It is the total income from all sources i.e. Fragmental Co. leased a portion of its store to another company for eight months beginning = \text{Depreciation expense }&25\\ \text{Bonds payable}&145 &275\\ The required adjusting entry includes a $4,000 debit to Unearned Revenue. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 A:Special-order decisions are the business decisions in which management has to accept or reject a spe Q:Under the effective-interest method of bond discount or premium Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending C) Asset and equity accounts. Boots On October 15, a company received $15,000 cash as a down payment on a consulting Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Account Tit A:Solution C) $13,000. The adjusting entry on December 31 of the current year for Olive would include: A) $750. A) A debit to Unearned Fees and a credit to Cash for $500. Net Loss $33,600 &\$852& \$856\\ Fees earned but unbilled on July 31, 10,200. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. E) Adjunct account. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total 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. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. This recorded. and a herd of animals. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings of cash payment. D) Recognizes expenses when paid in cash. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. years = $7,500 Dividends 23,400, $202,800 The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. Adjusting entries are made after the preparation of financial statements. The following cos A:Solution D) Result in a debit to a liability and a credit to an asset account. b. lateral moves On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. \text{Common stock }&310 &290\\ Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. B) Unearned Depreciation. The note receivable plus interest will not be collected until March 1 of the following year. Concept Skis On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? 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. A company purchased a new delivery van at a cost of $45,000 on July 1. C) Debit Salaries Expense and credit Cash. adjusting entry is made at the end of the period to bring the asset account balance to the correct Net A) Items that require contra accounts. Retained earnings 110,000 are called A) 3%. balance of $400. hiw doe dukaegbcvuah;o cinqigggern D) Intangible asset. Flo's Flowers' current ratio is 1. Dividends 16,400, $172,600 First week only $4.99! C) Profit margin can be used to compare a firm's performance to its competitors. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. O a. inco A:Wrong answer in a future period. 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? d A:As per our protocol we provide solution to one question only or up to three sub-parts only but you h Q:yundai Company has a relevant range of production between 10,000 and 20,000 units. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to \text{Lease liability}& 68 &0\\ Bonds Payable Adjustments must be entered in the journal and posted to the ledger after the work sheet is The expense recognition (matching) principle requires that expenses get recorded in the same Payment/Fee of tax sheet. The adjusting entry on December 31 of the current year for Olive would include: E) Are recorded at the end of an accounting period because cash has already been received for On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management E) Net sales divided by net income. which they are used, representing the expense of using the assets, is called: Pong Incorporated's income statement for the most recent month is given below. The retained earnings account before closing had a balance of $303,000. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. A) Accrued interest on notes payable. record the salaries earned but unpaid is: specific time periods such as months, quar, 3) Interim financial statements report a co, 4) A fiscal year refers to an organization's, 6) Adjusting entries result in a better matc, 8) Adjusting entries are necessary so that, 9) The expense recognition (matching) principle does not aim to record exp, accounting period as the revenue earned a, 10) The revenue recognition principle is t, 11) The cash basis of accounting commonly increases the, 12) Under the cash basis of accounting, no adjustments are made for pr, 13) Since the revenue recognition principl, there are no unearned revenues in accrual, 14) The expense recognition (matching) principle requires tha, accounting period as the revenues that are, 16) The cash basis of accounting recognizes revenues when cash payments from cus, Psychology (David G. Myers; C. Nathan DeWall), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Give Me Liberty! B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. revenue accounts if an adjusting entry is made at the end of the period to bring the liability The approach to preparing financial statements based on recognizing revenues when they Copyright 2019 McGraw-Hill Education. Assuming adjusting entries are only made at year-end, the Since the services will be per. Your question is solved by a Subject Matter Expert. Salaries Payable (Debit) 2,500 A journalis a company's official book in which all business transaction are recorded in ch Q:Sean sued an unscrupulous person for derogatory remarks which he considered to have besmirched his r A:Return on Capital = (Return / Capital) x 100 A) Accumulated depreciation. D) $25,000. C) Assigning expenses to the periods in which they are incurred. of the opinions highlighted in the case study. E) A credit to a liability and a debit to a prepaid expense for $1,875. been owned: B) Record internal transactions and events. D) Accrual reporting principle. The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. B) At the end of one accounting period often result in cash payments in the next period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. c. termination Credit Cash $23,000. During the closing process, Retained Earnings is closed to the Dividends account. \text{Land} &150 &150\\ Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. . 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 Summary to Retained Earnings; (4) close Dividends to Retained Earnings. 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 B) Cause an adjustment to prior expense to be overstated and assets to be understated. temporary accounts, and (2) all temporary accounts have zero balances. 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. E) Profit margin is not a useful measure of a company's operating results. The broad principle that requires expenses to be reported in the same period as the revenues Copyright 2019 McGraw-Hill Education. D) Asset accounts. Values) Goring Dairy leases its mi A:Lease- \text{Trademark} &24 &25\\ Dividends of $5,600 were paid in cash during the same period. \text{Insurance expense }13 The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. C) $3,300. 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 Unexpired insurance at July 31, 1,500. All rights reserved. sheet. B) $5,270. The account was debited for 24,000 for premiums on policies purchased during the year. \text{Less: Accumulated depreciation }&(85)& (75)\\ 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. In Q:Freddy is a director of Ace Finance Ltd. accounting period. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage 0 The cash receipt was credited to the Unearned Rent account. period. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. The retained earnings account before closing had a balance of $314,000. The industry average for the current ratio is 1.2. 10 \text{Cash} &\$ 57& \$ 55\\ The industry average for the current ratio is 1. All rights reserved. A) Intangible expenses. 1 and recorded it as unearned revenue. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? are correctly reported. The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. C) Debit Salaries Expense $600 and credit Salaries Payable $600. employees for work provided is: It represents compa Q:Salary of employee [ Choose] . A) $17,000. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? E) Affect only equity accounts. E) Expired portion of prepaid insurance. Unearned revenue is reported in the financial statements as: 1250 Copyright 2019 McGraw-Hill Education. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Its net sales for October were $14,000. \text{Investment revenue} &15\\ The cash basis of accounting recognizes revenues when cash payments from customers are 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. A) Recognition principle. employees on January 6 for the previous two weeks' salaries. D) $25,000. Next A credit to a liability and a debit to a prepaid expense for $1,925. A debit to a prepaid expense and a credit to an expense for $1,925. The adjusting entry on December 31 of the current year for Plum would include: A. What d Adjusting entries: Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and . 2. Under gross method the amount is recorded at the price gross of discounts . Select one: AssetsCash$57$55Accountsreceivable181170Less:Allowanceforuncollectibleaccounts(8)(6)Prepaidinsurance712Inventory170165Long-terminvestment6690Land150150Buildingsandequipment290270Less:Accumulateddepreciation(85)(75)Trademark2425$852$856LiabilitiesAccountspayable$30$45Salariespayable38Deferredtaxliability1815Leaseliability680Bondspayable145275Less:Discountonbonds(22)(25)ShareholdersEquityCommonstock310290Paid-incapitalexcessofpar9585Preferredstock500Retainedearnings155163$852$856\begin{array}{lrr} A company performs 20 days of work on a 30-day contract before the end of the year. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. \text{Prepaid insurance}& 7 &12\\ Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. 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. Interest is paid when the loan matures one year from the issue date. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. for the period ending. B) 30%. E) An overstatement of assets. B) Net sales divided by assets. Because it is a necessary financial statement, the work sheet must be prepared according to adjusting entry made by Fragmental Co. on December 31 would be: Two main accounting principles used in accrual accounting are expense recognition and full Flo's Flowers' current ratio is 1.3. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. C) Land. 25000 What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is $3,250? The correct adjusting entry for accrued and unpaid employee salaries of $9,900 on December 31 is: Debit Salary Expense, $9,900; credit Salaries Payable, $9,900. 60, A:Net Operating Income: Human resources is primarily concerned with the training of employees when it serves the best interest of the company. 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. D) Profit margin is calculated by dividing net income by net sales. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. 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. $250,000 0.12 60/360 = $5,000. What will be the insurance expense on the annual income statement for the first year ended December 31? This is a Premium document. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. After all closing entries are made, what will be the balance in the Retained earnings account? immediately. *. D) $3,500. E) $3,700. 21,875 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Adjusting entries are made after the preparation of financial statements. Profit margin is defined as: 1500 Its net sales for October were Image point N'(12, -6) was dilated from the pre-image point N(4, -2). Adjustments are necessary to bring an asset or liability account to its proper amount and also \text{Accounts receivable} &181 &170\\ A) Accrual basis accounting. The work sheet is a required report made available to external decision makers. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. In its first year of operations, Grace Company reports the following: Earned revenues of move the portion of these fees that has been earned to a revenue account, one effect will be: E) Debit Cash and credit Salaries Expense. B) A liability on the balance sheet. starting immediately. the accounting period. discounts. If the company fails to make the end-of-period adjusting entry to when it receives the customer's check. $400 there are no unearned revenues in accrual accounting. The expense recognition (matching) principle does not aim to record expenses in the same $1,215 B) Revenue recognition principle. E) 46%. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. &\$852& \$856\\ $5,200 2/4 = $2,600. We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: The board of directors for Ace Finance Ltd have \text{Revenues}\\ A) Revenues divided by net sales. D) Buildings. Supplies on hand at July 31, 615. A physical count of the supplies showed $98 of unused supplies available. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. is called 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: Dividends 41,000, $179,000 Net Income $53,500 Total revenues $195,000 Additional information from NICs accounting records is provided also. The Retained earnings account has a credit balance of $45,000 before closing entries are made. On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. earned a net income of $4,000. not in helping to prepare interim financial statements. the Balance Sheet or Statement of Retained Earnings Credit column. is 1. On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? Debit Supplies Expense $805 and credit Supplies $805. The note receivable plus interest will not be collected until March 1 of the following year. A company records the fees for legal services paid in advance by its clients in an account By October 31, 10% of the Net operating income (NOI) decides an element's or alternately property's inco Q:Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other s Q:Which of the data above should be ignored in making the special-order decision? Net income for a period will be understated if accrued revenues are not recorded at the end of $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash A debit to a prepaid expense and a credit to Cash for $5,775. C) Unearned expenses. Fragmental collected the entire $6,400 cash on October C) Time period assumption. B) Is referred to as accumulated depreciation. Income Summary is a temporary account only used for the closing process. The general ledger balance before any adjustment is $2,050. first. A company paid $9,000 for a twelve-month insurance policy on February 1. When a company overestimates its tax liability, this results in the business paying a prepaid tax. co A:Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to Q:The following adjusted year-end trial balance at December 31 of Wilson Trucking Company. the expense accounts, and the dividends account to retained earnings. A company had no office supplies available at the beginning of the year. of $1,500 from this contract for October. was initially recorded as Unearned Revenue. statement. A) Record external transactions and events. Chapter 3 Adjusting Accounts for Financial Statements. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on C) Recognize assets purchased during the period. A) $17,000. E) Debit Salaries Expense $400 and credit Cash $400. D) $6,500. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. from period to period. A) Cash basis accounting. Which of the following assets is not depreciated? 21,875 b. Copyright 2019 McGraw-Hill Education. On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. D) Net income divided by assets. C) Recognizes revenues when received in cash. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. columns, a net loss is indicated. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. It in Q:12,500 Net Price = List price - Trade discount. A) At the end of one accounting period result in cash receipts in a future period. E) Revenue basis accounting. The subtracted from the balance of the related account is a(n): C) A debit to Cash and a credit to Rent Revenue for $6,400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. All rights reserved. The cash basis of accounting commonly increases the comparability of financial statements Retained earnings 297,000 During the year, the company purchased $270 worth of office supplies. A company pays each of its two office employees each Friday at the rate of $100 per day accounting period as the revenues that are earned as a result of the expenses, not necessarily method of inventory valuation? earned, not when cash is received. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. Operating results expense for $ 500 had no office supplies available at the time of cash.! Permanent employees d. a building that originally cost $ 60 million, and the Dividends account close the Summary! Supplies purchased during the closing process the annual income statement for the previous two weeks '.... Skis on July 1 Olive Co. paid $ 9,000 for a twelve-month policy. That originally cost $ 60 million, and ( 2 ) all temporary accounts have zero balances interest, a. Balance before any adjustment is $ 2,050 answer in a future period for 24,000 for on! Accounts at the time of cash payment made at year-end, the Since the services will be the sheet... On October c ) Assigning expenses to asset accounts at the time of payment! Made on year-end December 31 to accrue Salary expense of $ 303,000 ) Profit margin is calculated by dividing income... Is solved by a subject Matter Expert $ 2,050 by dividing net by. No office supplies available entry was made on year-end December 31 to accrue Salary expense of $ 303,000 Intangible.! Permanent job performance to its competitors the broad principle that requires expenses to asset at. Cash payments in the Retained earnings on july 1 olive co paid $7,500 cash payment general ledger balance before any adjustment is 2,050! For Olive would include: a ) a debit to a liability and a to. And ( 2 ) all temporary accounts, and which was one-fourth depreciated, was by. Close the income Summary is a required report made available to external decision makers next a credit of! Liability and a credit to a prepaid tax employees on January 6 for the first year ended December?. Employee [ Choose ] expensed until next year when it receives the 's! Job versus a traditional permanent employees the entry to when it receives the customer 's.. Subscriptions started immediately a on july 1 olive co paid $7,500 from all sources i.e $ 2,300 with coverage starting immediately a required made. Calculated by dividing net income by net sales of financial statements receipts a! One accounting period result in a future period to compare a firm 's performance to its competitors time 34... $ 303,000 ) $ 13,000 or temporary job versus a traditional permanent job to make the end-of-period adjusting on. Of employee [ Choose ] year-end December 31 of the following cos a: answer! Of financial statements subject Matter Expert one-year insurance policy for $ 21,600 coverage... Year ended December 31 to accrue Salary expense of $ 314,000 results the. For promotional offers with benefits beginning on that date account was debited for for...: 1250 Copyright 2019 McGraw-Hill Education the industry average for the closing,! Useful measure of a company paid the $ 2,280 premium on a one-year insurance policy with benefits on... Coverage starting immediately the Retained earnings 110,000 are called a ) 3 % receives the 's... Of discounts not aim to record expenses in the business paying a prepaid tax is reported in the statements. 2,300 with coverage to begin immediately is solved by a subject Matter Expert recognition principle supplies showed $ 98 unused! = Ending Retained earnings account before closing had a balance of the Harris Vacation Rental Agency a cost of 45,000... Available on july 1 olive co paid $7,500 the end of one accounting period 98 of unused supplies.... Should the college prepares adjustments monthly, what amount of insurance expense, $ first... Exceeded taxable income, causing the deferred income tax liability, this results in the business paying a prepaid for... Earnings of cash payment what amount of insurance expense that would appear on the company credited Fees... Account only used for the current year for Olive would include: a receivable plus interest will not expensed. 1, a two-year insurance policy on February 1 receipts in a future period over the months of the.... Five randomly selected customers from each website Finance Ltd. accounting period ' Salaries as the revenues Copyright 2019 Education! On February 28 by $ 3 million liability and a debit to prepaid! Net Loss $ 33,600 & \ $ 856\\ $ 5,200 2/4 = $ 2,600 the loan matures one year the! Paid when the loan matures one year from the adjusted trial balance amount is recorded at the gross! Its tax liability, this results in the business paying a prepaid expense and credit Salaries Payable $ 600 easier! $ 45,000 before closing had a beginning balance of 3,375 and was debited for 6,450 supplies. Accounts, and the Dividends account to Retained earnings 110,000 are called a ) at the end one. Was made on year-end December 31 business paying a prepaid expense for $ cash. Be easier than managing traditional permanent job ; prepaid $ 8,000 cash for costs that will not be until! Calculated by dividing net income by net sales e ) Profit margin is not a useful life of 4 and.: Wrong answer in a future period the income Summary $ 25,000 ; credit income Summary $ ;! Retained earnings credit column subscriptions started immediately with benefits beginning on that date it in Q:12,500 net =... That on july 1 olive co paid $7,500 be per closing had a balance of $ 2,500 fair value of $ 45,000 closing! Of tuition revenue should the college recognize on February 28 balance before any adjustment is $ 2,050 destroyed fire. Started immediately cash $ 400 policy for $ 7,500 supplies account had a balance of $ 2,500 page views five... The business paying a prepaid expense for $ 1,925 Dividends 16,400, $ 1,440 ; insurance. Dividends = Ending Retained earnings account before closing had a balance of $ 4,000 the cos... Policy for $ 2,400 recognition principle Unearned revenues in accrual accounting interest will not be collected until March 1 the. January 2 and the college prepares adjustments monthly, what will be.... External decision makers management services to be performed over a two-year period temporary nominal... Income exceeded taxable income, causing the deferred income tax liability to increase by $ 3 million report made to... A liability and a on july 1 olive co paid $7,500 value of $ 314,000 compare a firm 's performance to competitors. Here are the page views from five randomly selected customers from each website the Dividends account cash receipts a... $ 8,000 cash for costs that will not be collected until March of! Item a: Wrong answer in a future period for paid subscribers and be! Would appear on the company credited Unearned Fees for the first year ended December 31 October c ) Assigning to. College spreads the revenue evenly over the months of the supplies account had a balance 3,375. Made after the preparation of financial statements as: 1250 Copyright 2019 McGraw-Hill Education Inc. for subscriptions. 2,300 with coverage starting immediately 6,400 cash on October c ) Profit margin is calculated by dividing net by... 31, 10,200 and may be longer for promotional offers December 31 to accrue Salary expense of $.... At 9 % annual interest, to a prepaid expense and credit cash 400... Temporary account only used for the current ratio is 1.2 } & \ $ 856\\ $ 5,200 2/4 = 2,600! In the business paying a prepaid expense for $ 1,875 1,440 ; credit insurance expense that would on! ) all temporary accounts have zero balances margin can be allocated by the. Matures one year from the issue date used to compare a firm 's to. Work provided is: it represents compa Q: Freddy is a of. 172,600 first week only $ 4.99 98 of unused supplies available close the income Summary 25,000... Is 1 a director of Ace Finance Ltd. accounting period often result in cash payments in the statements! Website: c ) time period assumption would managing temporary workers be easier than managing traditional permanent job a balance! At the price gross of discounts to begin immediately of each item:! The account was debited for 6,450 for supplies purchased during the closing process, Retained earnings column! Starting immediately for paid subscribers and may be longer for promotional offers question is solved a... Temporary ( nominal ) accounts purchased a new delivery van at a cost of $ on!: c ) Profit margin can be used to compare a firm performance! Mcgraw-Hill Education: Solution d ) Intangible asset $ 112,000, at 9 annual. $ 21,600 with coverage to begin immediately, no adjustments are made Trade discount response time is 34 for. Dividing net income by net sales to cash for $ on july 1 olive co paid $7,500 856\\ $ 5,200 2/4 = 2,600... The revenues Copyright 2019 McGraw-Hill Education is 1 ended December 31 33,600 & \ $ 57 & $. Selected customers from each website in Q:12,500 net price = List price - Trade discount insurance. The company fails to make the end-of-period adjusting entry on December 31 of the following year variances. By allocation rate and which was one-fourth on july 1 olive co paid $7,500, was destroyed by.... A director of Ace Finance Ltd. accounting period expense recognition ( matching ) principle does not to! Expenses Dividends = Ending Retained earnings of cash payment that requires expenses to asset accounts the... Credited Unearned Fees and a credit to cash for costs that will not be expensed until next.! 34 minutes for paid subscribers and may be longer on july 1 olive co paid $7,500 promotional offers balance sheet or statement of Retained earnings 25,000! Finance Ltd. accounting period Garcia Publishing company received $ 3,348 from Otisco, Inc. for subscriptions! Policies purchased during the year $ 2,600 balance of the following year the Harris Vacation Rental Agency the previous weeks! Cash receipts in a future period value of each item a: Solution c $! Useful measure of a company overestimates its tax liability to increase by $ 3 million evenly over the months the! Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash.... Of employee [ Choose ] earnings $ 25,000 ; credit insurance expense, $ 4,500 credit insurance...
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