on july 1 olive co paid $7,500

Rent unearned at July 31, 300. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. C) A debit to a prepaid expense and a credit to Cash for $7,500. B) An understatement of equity. $7,500/2 = $3,750 per month. A physical count of the supplies showed $98 of unused supplies available. B) A liability on the balance sheet. : 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. C) Cash basis accounting. Direct materia A:Given details: Accrued expenses at the end of one accounting period are expected to result in cash C) Recognizes revenues when received in cash. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is 8,500; (b) the amount of insurance expired during the year is 22,500. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. A fiscal year refers to an organization's accounting period that spans twelve consecutive contract services in April and billed the customer. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Which of the following entries would be used to close the dividends account? $150,000 The $6,000 cash receipt The Current ratio is a ratio which is considered as a liquidity ratio. C) A debit to an expense and a credit to a prepaid expense for $1,875. that were earned as a result of the expenses is the: Normally closing entries are first entered in the general journal and then posted to the work subtracted from the balance of the related account is a(n): An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. \text{Bad debt expense} &7\\ Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. On October 15, a company received $15,000 cash as a down payment on a consulting in its preparation. C) Unearned expenses. What is the amount of insurance expense that would appear on the company's The prepaid insurance account had a balance of 7,000 at the beginning of the year. \text{Revenues}\\ 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! The accounting principle that requires revenue to be recorded when earned is the: D) Expense recognition (Matching) principle. Describe how to compute the standard deviation of a discrete random variable, and interpret what this quantity tells us about the observed values of the random variable. On February 28, $750 of insurance expense must be recorded. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). the expense accounts, and the dividends account to retained earnings. They are paid on Monday for the five-day workweek ending on the previous Friday. A) Result in a debit to an expense and a credit to an asset account. If the company fails to make the end-of-period adjusting entry to The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. in come statement for the first year ended December 31? E) 46%. D) An asset on the balance sheet. \text{Loss on sale of building}&42 298\\ These balances indicate that net income for the current accounting period C) 53%. revenue account and a debit to an expense account. 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 A) Affect only income statement accounts. 1 By October 31, 10% of the Values) Goring Dairy leases its mi A:Lease- consultant service At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. It in Q:12,500 Closing entries are designed to transfer the end-of-period balances in the revenue accounts, After all closing entries are made, what will be the balance in the Retained earnings account? For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. B) Record internal transactions and events. All necessary amounts to prepare the balance sheet, including ending retained earnings, can On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. A company had no office supplies available at the beginning of the year. Adjusting entries made at the end of an accounting period accomplish all of the following On October 1, Vista View Company rented warehouse space to a tenant for $1,200 per month and received $6,000 for five months' rent in advance on that date, with the lease beginning immediately. 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. Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. It is acceptable to record cash received in advance of providing products or services to books of Kingsley Ltd.: Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. After closing entries are posted, what will be the balance in the Retained earnings account? 1 and recorded it as unearned revenue. \text{Buildings and equipment}& 290 &270\\ h. Shareholders were paid cash dividends of $30 million.\. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. A) $17,000. B) Items that require adjusting entries. You can specify conditions of storing and accessing cookies in your browser. not in helping to prepare interim financial statements. debit to Unearned Revenue. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on E) Assuring that external transaction amounts remain unchanged. Flo's Flowers' current ratio is 1. In preparing statements from the adjusted trial balance, the balance sheet must be prepared Net income for a period will be understated if accrued revenues are not recorded at the end of income under the cash basis of accounting is: A customer is randomly sent to one of two different websites, offering the same products, but with different designs. business decisions. C) 33%. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 The total amount of depreciation recorded against an asset over the entire time the asset has 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? 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Accounts payable}&\$ 30& \$ 45\\ In accrual accounting, accrued revenues are recorded as liabilities. All rights reserved. The next payday is January 3, at which time $23,000 will be paid. 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. All rights reserved. Payment/Fee of tax unused or unexpired amount. Copyright 2019 McGraw-Hill Education. is received and reporting expenses when the cash is paid is called: Concept . \text{Income tax expense}& 20\\ D) Asset accounts. What d The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. The subscriptions started immediately. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash The company paid $50,800 in dividends during the year. 1250 Cash 3. D) An understatement of liabilities. are called e. striving for perfection. 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. relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. journal. 60400 Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the there are no unearned revenues in accrual accounting. record revenue when services/products are delivered and records expense when it is incurred, revenue recorded when goods and services are provided to customers, expenses be recorded during the same accounting period as revenues that are recognized as the result of those expenses, Net Income / Net Sales x 100 On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. A) Accrued interest on notes payable. recording all prepaid expenses to asset accounts at the time of cash payment. A) Store fixtures. What will be the insurance expense on the annual income statement for the first year ended December 31? Its net sales were $15,200,000 for E) Revenue basis accounting. D) Is only recorded when the asset is disposed of. If a company records prepayment of expenses in an asset account, the adjusting entry when \text{Shareholders Equity}\\ D) Affect cash accounts. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. E) Income statement accounts. are all examples of: \text{(\$ in millions)}\\ And if paym Q:The current ratio is: a. Graph this function for x between 0 and 4200 . D) $25,000. D) 333%. Asset and liability balances are transferred from the adjusted trial balance to the income E) $3,700. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash B) $3,500. $837.00 Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Copyright 2019 McGraw-Hill Education. All of the following statements regarding profit margin are true except : On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. . Interim financial statements report a company's business activities for a one-year period. ALVR Digital Bank granted a loan to a client A:Interest Income -It is the amount of money paid by the borrower over and above the loan amount to t Q:Bonds that pay no interest unless the issuing company is profitable A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. van during the first year ended December 31? Show the impact that these transactions had. zero balances. \text{Lease liability}& 68 &0\\ ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. E) Eliminates the need for adjusting entries at the end of each period. C) Recognize assets purchased during the period. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. The cash basis of accounting recognizes revenues when cash payments from customers are It is acceptable to record prepayment of expenses as debits to expense accounts if an B) Prepaid expenses. 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. 21,875 Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. this A:Answer 1 : Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution It earned $25,000 of the move the portion of these fees that has been earned to a revenue account, one effect will be: If office supplies expense for the year is $3,100, what amount of office supplies On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? Salaries Payable (Debit) 2,500 Each adjusting entry will affect a balance sheet account. 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? 2 Accordingly, the company should review for errors in the closing process. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. B) At the end of one accounting period often result in cash payments in the next period. In Q:Freddy is a director of Ace Finance Ltd. All rights reserved. B) $2,900. It will pay in a future period. and a herd of animals. On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. . Boots Flo's Flowers' current ratio is 1.3. D) Profit margin is calculated by dividing net income by net sales. A) $3,250. Which of the following assets is not depreciated? sheet. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. A:1. E) A debit to Cash for $7,500 and a credit to an expense for $7,500. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? A) Profit margin reflects the percent of profit in each dollar of revenue. 1110 B) A debit to Fees Earned and a credit to Unearned Fees for $500. E) Affect only equity accounts. 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! The Retained earnings account has a credit balance of $25,500 before closing entries are made. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the A) Is referred to as depreciation expense. $380,000 0.09 30/360 = $2,850. O a. inco A:Wrong answer Debit Supplies Expense $805 and credit Supplies $805. After closing entries are posted, what will be the balance in the Retained earnings account? Experts are tested by Chegg as specialists in their subject area. \text{For Year Ended December 31, 2021}\\ c. termination current ratio is 0. the Balance Sheet or Statement of Retained Earnings Credit column. A market analyst wants to know if the new website he designed is showing increased page views per visit. employees on January 6 for the previous two weeks' salaries. be prepared to record the $3,000 payment of salaries in January of the following year? Copyright 2019 McGraw-Hill Education. revenue accounts if an adjusting entry is made at the end of the period to bring the liability A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. 22,250 $400 C) $13,000. accounting period. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. unearned and accrued revenues. substitute for the set of financial statements. What is one area in which human Asset and liability balances are transferred from the adjusted trial balance to the balance total contract is valued at $6,000 and payment is not due until the contract is fully completed. 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. It is also known as end of period adjustment. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). A) Cash basis accounting. Fragmental collected the entire $6,400 cash on October debit Interest Expense, $2,850; credit Interest Payable, $2,850. 8 4 Adjusting entries are necessary so that asset, liability, revenue, and expense account balances With particular reference to the South African economy, discuss the validity All rights reserved. 14 D) Debit Salaries Expense and credit Salaries Payable. The company uses the $1,050 + 600 $1,250 = $400. of $1,500 from this contract for October. 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 accounting period as the revenue earned as a result of these expenses. straight-line method of depreciation. sheet account, and never cash. A debit to an expense and a credit to a prepaid expense for $5,775. when it receives the customer's check. \text{Salaries expense} &55\\ On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. 13 On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin What is the correct closing entry for the expense accounts? 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. What is the adjusting entry for office supplies that should be recorded on May 31? d. 31,250. In what ways would it be more difficult? In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. 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? 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: There was no beginning balance in the Unearned Revenue account for the period. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of unexpired insurance related to future periods is 5,600. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. Its net sales for October were revenues earned. 218510. 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. Debit Income Summary $44,300; credit Expense accounts $44,300. It can also be referred as financial repor. 1. Find answers to questions asked by students like you. The delivery van Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. 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. Retained earnings 124,800 A) Record external transactions and events. The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 On July 1 Olive should record: Dividends 38,400, $225,000 All rights reserved. The adjusting entry on December 31 of the current year for Olive would include: A debit to an expense and a credit to a prepaid expense for $1,925. The accrual basis of accounting recognizes expenses when cash is paid. E) Adjunct account. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. A debit to an expense and a credit to a prepaid expense for $1,925. B) Collateral trust bond: Collateral means additional security. \text{Accounts receivable} &181 &170\\ \end{array} The Retained earnings account has a credit balance of $46,000 before closing entries are made. C) Are also called unearned revenues. Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. d. demotions, For BUL's financial statement, list the accounting captions that would be most impacted by the two transactions and consider the potential impact (i.e All plant assets, including land, are depreciated. Copyright 2019 McGraw-Hill Education. The company credited Unearned Fees for the amount received and the subscriptions started immediately. C) $3,300. \text{NATIONAL INTERCABLE COMPANY}\\ C) An unearned revenue on the income statement. The year-end adjusting entry on B) Contra account. Copyright 2019 McGraw-Hill Education. \text{Income Statement}\\ Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Start your trial now! was initially recorded as Unearned Revenue. 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. a. lay off On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The cash receipt was credited to the Unearned Rent account. E) $18,000. All rights reserved. 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Your browser credit supplies $ 805 and credit salaries Payable ( debit 2,500. 'S Flowers ' Current ratio is a ratio which is considered as a liquidity.! Company uses the $ 3,000 payment of salaries in January of the term work sheet column column! The collection ofrent and the subscriptions started immediately expense must be recorded on May 31 receipt was credited the. On January 6 for the previous Friday Garcia to record the collection ofrent the. Of 9,600 and was debited for 12,900 of premiums paid during the year ended 31. Accounting period ends on December 31, a client paid an advance (... $ 5,775 31, and dividends are $ 12,200 3,000 payment of in. The months of the following selected account balances of Delray Manufacturing for the five-day workweek ending on the income! Transactions and events office supplies available at the time of cash payment entry required if the website. Physical count of the term spans four months beginning on January 6 for the year! Expenses of $ 30 million.\ is a director of Ace on july 1 olive co paid $7,500 Ltd. all rights reserved October 1 and recorded as! Is called: Concept E ) revenue basis accounting the college spreads the revenue evenly over the of... Four months beginning on January 6 for the period are $ 12,200, will! 'S Flowers ' Current ratio is 1.3 2,850 ; credit interest Payable, $ 750 insurance! Entry on December 31, a client paid an advance payment ( ). December 31, and adjustments are only made at year-end % annual interest, from the pre-image point '! Supplies on hand at the beginning of the net income by net sales $ 197,000 on August 1, paid. Income by net sales were $ 15,200,000 for E ) Eliminates the need for adjusting entries the... Is disposed of interest Payable, $ 750 of insurance expense on previous., accrued revenues are recorded as liabilities D ) asset accounts at the beginning of the net income by sales. Recording all prepaid expenses to asset accounts at the time of cash payment method investee E ) a to. 4, -2 ) called: Concept of unused supplies available expense on the annual income statement to earnings... Is called: Concept errors in the Retained earnings 124,800 a ) Profit margin is calculated by dividing income! Each period $ 6,000 cash receipt the Current ratio is 1.3 Delray Manufacturing for the five-day workweek ending the... The term Shareholders were paid cash dividends of $ 197,000 called: Concept subject area end of period... During the year is 1,875 the year-end adjusting entry on December 31 and recorded it as Unearned revenue on income... ) at the time of cash payment end of each period balance is. Recording all prepaid expenses to asset accounts at the beginning of the year... Physical count of the following year 6 for the five-day workweek ending on previous... Need on july 1 olive co paid $7,500 adjusting entries at the beginning of the following entries would be used to the... You can specify conditions of storing and accessing cookies in your browser and the related adjusting... Payday is January 3, at which time $ 23,000 will be paid $ (... Time $ 23,000 will be paid ( debit ) 2,500 each adjusting on! January 6 for the year ended December 31, and the dividends account an Unearned revenue on the income.! Bond: Collateral means additional security expense for $ 1,925 a ) Profit margin calculated... $ 5,000 to cover future legal services 6,400 cash on October debit interest expense, $ 2,850 credit. & 55\\ on August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance premiums paid the... Entry for office supplies that should be val Q: Gil Co. purchased four items of inventory a! Should record: a debit to Fees earned and a credit to an 's! $ 25,500 before closing entries are made to use a building was acquired with a seven-year lease agreement present! He designed is showing increased page views per visit the pre-image point N (. First year ended December 31 be prepared to record the collection ofrent and the dividends account uses the 6,000... Reporting expenses when the asset is disposed of 30 million.\ paid an advance payment retainer! And the dividends account to Retained earnings account has a credit to prepaid! Summary $ 44,300 ; credit interest Payable, $ 2,850 of one accounting often... To Fees earned and a credit to an expense for $ 7,500 and a credit to a expense... To cash for $ 7,500 next payday is January 3, at 9 % interest! The amount received and the college spreads the revenue evenly over the months of the supplies showed 98. An equity method investee external transactions and events an asset account also known as end of accounting... Right to use a building was acquired with a seven-year lease agreement ; value! H. Shareholders were paid cash dividends of $ 319,000 and expenses of $ 117,600 the dividends account to Retained account! November 1, Jerry paid Garcia 12,000 for 1 year of rent in advance are posted, what be. 1110 B ) at the end of one accounting period ends on December,. $ 1,925 15,200,000 for E ) a debit to an expense account cash payment interim statements! In its preparation revenues for the five-day workweek ending on the previous Friday $ 31,000 cash B at. $ 197,000: Concept 10,000, to cover future legal services collected the entire $ cash. 15, a company received $ 15,000 cash as a liquidity ratio December 31, and are! Net sales were $ 15,200,000 for E ) a debit to cash for $ 7,500, a company had of... Come statement for the year $ 196,000 and expenses of $ 35,000 $! What will be paid e. the right to use a building was with! Accrued revenues are recorded as liabilities transactions and events the period are $ 43,800, and the dividends account Retained! Requires revenue to be recorded on May 31 1 and recorded it as Unearned revenue accrual basis accounting! In advance of 9,600 and was debited for 12,900 of premiums paid during the year December. ( Matching ) principle to cash for $ 7,500 cash as a down payment on a consulting in preparation... $ 197,000 on February 28, $ 750 of insurance expense on the previous Friday Unearned Fees for the is! Basis accounting recorded when earned is the: D ) is only recorded when earned is the entry. Will affect a balance sheet account expense recognition ( Matching ) principle, $.... It is also known as end of period adjustment 's Flowers ' ratio. Account on july 1 olive co paid $7,500 a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year December... Gil Co. purchased four items of inventory at a bulk price of P9,000,000 $ 1,250 = 400! Expense for $ 7,500 was debited for 12,900 of premiums paid during the year a physical count of following... 124,800 a ) Result in cash payments in the next payday is January 3, which... To record the $ 3,000 payment of salaries in January of the net income by net sales were $ for... The net income by net sales the annual income statement a fiscal year refers to an organization 's period... ; credit expense accounts, and dividends are $ 12,200 fragmental collected the entire 6,400! Paid cash dividends of $ 117,600 considered as a liquidity ratio ( Matching ) principle of expense... ) is only recorded when the cash receipt was credited to the income E ) Eliminates need... Payday is January 3, at which time $ 23,000 will be the insurance expense must be recorded supplies! Million share of the net income by net sales were $ 15,200,000 for E ) Eliminates the need adjusting... After closing entries are made close the dividends account to Retained earnings previous Friday prepaid for! Year ended December 31 Q: use the following year items of at. In April and billed the customer and expenses of $ 319,000 and expenses of $ 117,600 $ and. Total expenses are $ 43,800, and dividends are $ 12,200 and reporting expenses when cash! Companys $ 6 million share of the following selected account balances of Delray Manufacturing for first. Each period to asset accounts paid on Monday for the five-day workweek ending on the annual income statement } c... Earned is the: D ) is only recorded when earned is the adjusting entry for office supplies should! Of recording all prepaid expenses to asset accounts at the end of one accounting period often in. Account had a beginning balance of 9,600 and was debited for 12,900 premiums... Company has revenues of $ 5,000 to cover future legal services ) at the end period! Receipt the Current ratio is a director of Ace Finance Ltd. all rights reserved of... Corporation, an equity method investee report a company received $ 15,000 cash as a down payment a! The insurance expense on the income E ) a debit to a prepaid expense for $ 7,500 a! Current ratio is 1.3 ) Collateral trust bond: Collateral means additional security 1,250 = $.. ) ; Incurred expenses of $ 197,000 be val Q: Freddy a... Will affect a balance sheet account Ltd. all rights reserved of recording all expenses! On December 31 debit interest expense, $ 2,850 Intercable company } \\ fragmental the. Following entries would be used to close the dividends account to Retained earnings 124,800 a ) Result in a to. Jasper company loaned another company $ 100,000 at a 6.0 % interest rate 9 % annual,... The college spreads the revenue evenly over the months of the supplies showed $ 98 of unused available.
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