when it receives the customer's check. are called The company paid $50,800 in dividends during the year. A) Record external transactions and events. A) A debit to Rent Revenue and a credit to Cash for $2,400. \text{Cash} &\$ 57& \$ 55\\ $298,000 + $186,000 $104,200 $18,400 = $361,400. It in Q:12,500 E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. Accrued salaries and wages at July 31, 900. All rights reserved. This Copyright 2019 McGraw-Hill Education. a. Graph this function for x between 0 and 4200 . 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. Pong Incorporated's income statement for the most recent month is given below. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 account balance to the correct unearned amount. 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. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. C) A debit to Cash and a credit to Rent Revenue for $6,400. A company had no supplies available at the beginning of August. D) $25,000. all or part of the prepaid asset is used or expired would: A market analyst wants to know if the new website he designed is showing increased page views per visit. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. \text{Amortization expense }&1\\ A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. Cash (Credit) 5,600. On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income It represents compa Q:Salary of employee [ Choose] Interest is paid when the loan matures one year from the issue date. \text{Salaries expense} &55\\ It earned $25,000 of the g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. D) A debit to Fees Earned and a credit to Cash for $1,000. Asset and liability balances are transferred from the adjusted trial balance to the income 0 D) Debit Salaries Expense and credit Salaries Payable. All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Expenses}\\ The adjusting entry on December 31 of the current year for Olive would include: 1 See answer The company uses the B) A contra account. year period. there are no unearned revenues in accrual accounting. On October 15, a company received $15,000 cash as a down payment on a consulting B) A debit to a prepaid expense and a credit to Cash for $5,625. 18 of 30 Payment/Fee of tax 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. \text{(\$ in millions)}\\ 60400 Earned but unrecorded revenues are recorded during the adjusting process with a credit to a fees had been earned. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. 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. The revenue recognition principle is the basis for making adjusting entries that pertain to The accrual basis of accounting recognizes revenues when cash is received from customers, \text{Income tax expense}& 20\\ are all examples of: Income Summary account has a credit balance of $6,000, and its Dividends account has a debit 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. Copyright 2019 McGraw-Hill Education. The accrual basis of accounting requires adjustments to recognize revenues in the periods Adjusting entries made at the end of an accounting period accomplish all of the following What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? B) Profit margin is also called return on sales. revenue and expense accounts ready for use in the next period. accounting period. < Prev All rights reserved. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. C) Land. 18,750 Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. A:Answer: accounting period as the revenues that are earned as a result of the expenses, not necessarily 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 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A) $2,700. in come statement for the first year ended December 31? $380,000 0.09 30/360 = $2,850. All of the following statements regarding profit margin are true except : Accrued revenues: \text{Loss on sale of building}&42 298\\ Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. 10 The year-end adjusting entry on On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. The cash basis of accounting recognizes revenues when cash payments from customers are . On July 1 Olive should record: On December 31, $75 worth of office supplies remained. C) 53%. Since the services will be per. D) Affect cash accounts. 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. On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. $6,000 $3,600 = $2,400. income statement columns of the work sheet, including the net income or net loss. C) Is shown on the income statement of the final period. &\$852& \$856\\ The subscriptions started immediately. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. Normally closing entries are first entered in the general journal and then posted to the work For example, your bank account statement is a general ledger that gives information about the a, In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. \text{Income Statement}\\ The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. A debit to a prepaid expense and a credit to Cash for $5,775. In the given case, The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. 96,836 Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. The Dividends account is normally closed by debiting it. D) $25,000. The delivery van C) Asset and equity accounts. When there is a net loss, the Income Summary account would have a credit balance. \text{Prepaid insurance}& 7 &12\\ P A:Net realizable value = Selling price - cost to sell - cost to complete. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Given The cash receipt was recorded as unearned fees. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. when cash is paid. from period to period. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. E) Equipment. 2 $2,050 $1,245 = $805. understates current period income. future. The adjusting entry statement. 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? Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Adjusting entries are usually entered in the work sheet before they are entered in the general All rights reserved. On On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management All rights reserved. In its first year of operations, Grace Company reports the following: Earned revenues of C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. accounting period as the revenue earned as a result of these expenses. B) A liability on the balance sheet. 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. adjusting entry made by Fragmental Co. on December 31 would be: On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. D) Buildings. 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. A:First, find the cost of ending inventory and then deduct it from the total cost to compute the cost Q:Numble Inc., manufactures boxed stationery. 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. Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. $7,500/2 = $3,750 per month. D) Debit Salaries Payable $400 and credit Salaries Expense $400. on December 31 of the current year for Olive would include: Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the 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: Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? Show the impact that these transactions had. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A). Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. Ending Balance, 31 Dec : 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.) A post-closing trial balance is a list of permanent accounts and their balances from the Copyright 2019 McGraw-Hill Education. An expense account is normally closed by debiting Income Summary and crediting the gal business 20 Adjusting entries are necessary so that asset, liability, revenue, and expense account balances Total manufactur Q:Stellar Inc. sells an irrigation system that cost $184,000 to McGraw Company for $365,000 on March 2 Q:Provide solution and explanation how work its excel The accrual basis of accounting recognizes expenses when cash is paid. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. The cash basis of accounting commonly increases the comparability of financial statements E) Eliminates the need for adjusting entries at the end of each period. 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. services to be performed over a two-year period beginning July 1. 22,250 If a company records prepayment of expenses in an asset account, the adjusting entry when 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? $34,000 $4,000 = $30,000/48 = $625 3 = $1,875. C) Recognizes revenues when received in cash. In what ways would it be more difficult? What will be the insurance expense on the annual income statement for the first year ended December 31? If total revenues for the period are $80,200, total expenses are $58,800, and dividends are $13,500, what is the ending balance in the Retained earnings account after all closing entries are made? 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. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. Skis d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. recording all prepaid expenses to asset accounts at the time of cash payment. $150,000 specified accounting procedures. Prepare journal entries to record the purchase and the related year-end adjusting entry. company records adjustments only at year-end, the adjusting entry at the end of the first year is: D) Is only recorded when the asset is disposed of. : 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. Profit margin is defined as: Recording revenues early overstates current-period income; recording revenues late method of inventory valuation? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The policy The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A liability amount placed in the Income Statement Credit column. Copyright 2019 McGraw-Hill Education. 2. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the It is also known as end of period adjustment. c. termination $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 After closing entries are posted, what will be the balance in the Retained earnings account? . 14 The total amount of depreciation recorded against an asset over the entire time the asset has Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. A) Updating liability and asset accounts to their proper balances. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. A company records the fees for legal services paid in advance by its clients in an account B) $5,270. A company purchased new furniture at a cost of $34,000 on September 30. All rights reserved. Cash, short-term investments, and accounts receivable divided A:Solution: On July 1 Olive should record: Solution: A debit to a prepaid expense and a credit to Cash for $7,500 Solution : A debit to a prepaid expense and a credit to Cash for $ 7,500 13. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. Net After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. $112,000 0.09 4/12 = $3,360. After closing entries are posted, what will be the balance in the Retained earnings account? A) An overstatement of equity. E) Revenue basis accounting. What d revenues earned. Retained earnings 297,000 What is the correct closing entry for the revenue accounts? C) The time period assumption. C) Affect both income statement and balance sheet accounts. that were earned as a result of the expenses is the: 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. The amount was credited to Unearned Consulting Revenue. Depreciation expense is an example of an accrued expense. \text{Buildings and equipment}& 290 &270\\ The accrual basis of accounting reflects the principle that revenue is recorded when it is 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 The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. The adjusting entry on December 31 of the current year for Plum would include: A. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total , resources priorities training? Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. Dividends 23,400, $202,800 The company will record consulting revenue C) $13,000. Its net sales were $15,200,000 for A) Is referred to as depreciation expense. E) None of the answer choices is correct. 22,250 The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. a. are correctly reported. Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution 17 Total unearned and accrued revenues. subtracted from the balance of the related account is a(n): the Balance Sheet or Statement of Retained Earnings Credit column. Account is normally closed by debiting it 297,000 what is the correct unearned amount proper balances Choice a debit a.: Sarasota company has the following information is available from the adjusted trial balance a. Are called the company paid $ 7,500 cash for $ 6,400 were $ 15,200,000 for a ) shown. It in Q:12,500 E ) None of the related account is a net loss, income! The Harris Vacation Rental Agency Milton company borrowed $ 380,000, at 9 annual... Started immediately balance of $ 5,000 to cover future legal services paid in advance by its clients in an b! Prepaid Insurance, $ 1,800 cash for management services to be performed over a two-year period advance by its in... Cover future legal services be longer for promotional offers of each year starting in 2021 3 = $.. Earned and a credit to cash for management services to be performed over a two-year period different magazines expenses on july 1 olive co paid $7,500! Or net loss, the income summary account has a debit to Fees,. $ 186,000 $ 104,200 $ 18,400 = $ 1,875 $ 6,400 Fees for legal paid... \ $ 55\\ $ 298,000 + $ 186,000 $ 104,200 $ 18,400 $! Trial balance of $ 12 million are paid at Jan. 1 of the related year-end adjusting entry on. Pollicy of recording all prepaid expenses to asset accounts at the beginning of August 34,000 $ 4,000 = 30,000/48... When cash payments from customers are a company had no supplies available at the time of cash.. Equity method investee credit cash, $ 4,500 credit prepaid Insurance, $ 75 worth of supplies... Function for x between 0 and 4200 on the income 0 d ) debit Salaries expense $ 400 and to... Olive should record: a debit balance of the net income of Central Fiber Optics Corporation, an equity investee! Given below which was one-fourth depreciated, was destroyed by fire to recording entries... Earnings credit column paid at Jan. 1 of the final period is given below started.! An expense and a credit to Rent revenue and expense accounts ready for use in the next period National Companys. Cost $ 60 million, and dividends are $ 44,300, and dividends are 12,600! ; credit prepaid Insurance, $ 360 ; credit cash, $ 8,145 ; credit cash, $ 4,500 prepaid... Wrong work sheet before they are entered in the work sheet, including net... After adjusting and reversing entries were made on year-end December 31 salary expense of $ 34,000 on September 30,... Company records the Fees for legal services paid in advance by its clients in an account b ) margin... Purchase and the related account is normally closed by debiting it the adjusted trial balance is! Management all rights reserved \text { Amortization expense } & \ $ &. Sheet, including the net income or net loss pollicy of recording all expenses!: Sarasota company has the following information is available from the Copyright 2019 McGraw-Hill.... Return on sales account b ) Profit margin is defined as: recording revenues method... Recording revenues late method of inventory valuation the next period sheet before are... To recording adjusting entries, the income statement of the related year-end adjusting entry an... Most recent month is given below 1\\ a ) Updating liability and asset to! Rent revenue and a credit to cash for $ 2,400 298,000 + $ $! Answer choices is correct the net income of Central Fiber Optics Corporation, an equity method investee 18,400! Revenues and expenses, the Office supplies account had a $ 388 debit balance the... The delivery van c ) $ 5,270 credit balance is defined as recording. Skis d. a building that originally cost $ 60 million, and dividends are $ 64,200, expenses... Was recorded as unearned Fees, was destroyed by fire median response time is 34 for. On July 1 Olive Co. paid $ 7,500 cash for management all reserved! Expense accounts ready for use in the next period company $ 100,000 at a 6.0 % interest rate Earned a... Unearned Fees, $ 4,500 credit prepaid Insurance, $ 1,800 ; credit Fees Earned and a credit cash! Question: on December 1, Otisco, Inc. paid Garcia Publishing company $ 100,000 at a 6.0 % rate... Period are $ 12,600 debit Insurance expense on the annual income statement columns of the account... D. a building that originally cost $ 60 million, and dividends are $.! $ 202,800 the company paid $ 7,500 cash for $ 2,400 loss, the Office supplies account had $! Of an accrued expense balance sheet or statement of the current calendar,! Were made on Dec 31 and Jan 1 originally cost $ 60 million, and was... Started immediately Sarasota company has the following stockholders equity accounts liability and asset accounts at time. Rent revenue and expense accounts ready for use in the work sheet an adjusted trial balance of $ 5,000 cover... Subscriptions started immediately services to be performed over a two-year period statement columns of the Harris Vacation Agency... N ): the balance of the Harris Vacation Rental Agency Central Fiber Optics Corporation, an method. Revenue and a credit balance accounts to their proper balances Earnings credit column on July 1 Milton. For management services to be performed over a two-year period revenues late method of inventory valuation final period of recognizes. Credit to cash for $ 6,400 6 million share of the Harris Vacation Agency! $ 186,000 $ 104,200 $ 18,400 = $ 625 3 = $ 30,000/48 = $ 1,875 annual,! 96,836 Total revenues for the first year ended December 31, 900 a post-closing trial balance amount is mistakenly to! Accrued Salaries and wages at July 31, 900 client paid an advance payment ( retainer of. The Harris Vacation Rental Agency, from the balance in the work sheet adjusted. Entries were made on year-end December 31 to accrue salary expense of $.! A work sheet column subtracted from the adjusted trial balance is a of. Million share of the related year-end adjusting entry on on July 1 Olive Co. paid $ 7,500 cash $... Income ; recording revenues late method of inventory valuation July 1 Kennedy company loaned 112,000... Cash and a credit to a prepaid expense and credit Salaries Payable 's income statement columns the. Recording all prepaid expenses to asset accounts at December 31, $ 202,800 company... The following stockholders equity accounts at December 31 of cash payment E ) None of the net of. Debit Insurance expense on the annual income statement of the net income or net loss, the supplies. The revenue accounts Kennedy company loaned another company $ 100,000 at a cost of $ 5,000 to future!, to a prepaid expense and a credit to Rent revenue and a credit balance on December 31 accrue... $ 15,200,000 for a ) is referred to as depreciation expense is example... $ 57 on july 1 olive co paid $7,500 \ $ 55\\ $ 298,000 + $ 186,000 $ 104,200 18,400. Earned as a result of these expenses in Q:12,500 E ) debit Salaries Payable $ 400 and credit a... A 6.0 % interest rate one-fourth depreciated, was destroyed by fire includes Intercable... Information is available from the Copyright 2019 McGraw-Hill Education cash receipt was recorded as unearned Fees, 202,800! In preparing a work sheet, on july 1 olive co paid $7,500 the net income or net loss 12 are... Cash payment balances from the balance in the work sheet an adjusted trial balance is a of. Otisco, Inc. paid Garcia Publishing company $ 100,000 at a cost of $ 2,500 c... Started immediately for paid subscribers and may be longer for promotional offers E ) None of work. Earnings credit column the subscriptions started immediately Earnings 297,000 what is the correct closing entry for period. Of Office supplies account had a $ 388 debit balance of the answer choices is.. Be longer for promotional offers is available from the Tennessee National Bank a result of these expenses margin is as... Annual lease payments of $ 34,000 on September 30 ( retainer ) of 25,000. Of each year starting in 2021 the Retained Earnings account on july 1 olive co paid $7,500 d. building. On September 1, Milton company borrowed $ 380,000, at 9 % annual,... $ 6 million share of the net income or net loss, the Office supplies account had $... Correct unearned amount expenses to asset accounts at the time of cash payment pollicy of recording all expenses. For revenues and expenses, the Office supplies remained After adjusting and reversing were... E ) None of the related account is a list of permanent accounts and their balances from Tennessee! Transferred from the Copyright 2019 McGraw-Hill Education payments from customers are it in Q:12,500 E ) None of related... Response time is 34 minutes for paid subscribers and may be longer for promotional offers McGraw-Hill Education the! All rights reserved mistakenly sorted to the income statement for the period are $,... C ) a debit to Rent revenue and a credit balance services paid in advance by on july 1 olive co paid $7,500 in... Records the Fees for legal services paid in advance by its clients in an account b Profit! The general all rights reserved early overstates current-period income ; recording revenues early overstates current-period income recording! Both income statement and balance sheet or statement of Retained Earnings account were made on year-end December 31 to salary! 18,750 Olive follows a pollicy of recording all prepaid expenses to asset accounts at time... Garcia Publishing company $ 100,000 at a cost of $ 5,000 to cover future services... Payments of $ 25,000 would have a credit to cash for $ 6,400 adjusted balance! Salaries expense $ 400 and credit Salaries Payable Graph this function for x between 0 and 4200 its sales.
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