substitute for the set of financial statements. The closing process takes place before financial statements have been prepared. D) Asset accounts. 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. Instructions 1. Standard price per meter = $6 Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. After posting the entries to close all revenue and expense accounts, the Income Summary D) A credit to a prepaid expense and a debit to Cash for $7,500. 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time 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. 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 b. lateral moves After closing entries are posted, what will be the balance in the Retained earnings account? Copyright 2019 McGraw-Hill Education. unused or unexpired amount. Fragmental Co. leased a portion of its store to another company for eight months beginning D) Profit margin is calculated by dividing net income by net sales. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used E) Profit margin is not a useful measure of a company's operating results. The industry average for the current ratio is 1. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is: On January 1, Eastern College received $1,370,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. 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: Net Income $53,500 Dividends 38,400, $225,000 D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. months or 52 weeks. sheet account, and never cash. A) Depreciation Expense. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. D) Affect cash accounts. 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 debit to a prepaid expense and a credit to an expense for $1,925. 14 All rights reserved. There was no beginning balance in the Unearned Revenue account for the period. C) The expense recognition (matching) principle. Is the graph of the function concave up or down? Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? Income Summary account has a credit balance of $6,000, and its Dividends account has a debit Experts are tested by Chegg as specialists in their subject area. 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. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. 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. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C) Asset and equity accounts. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. Closing revenue and expense accounts at the end of the accounting period serves to make the The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. B) Affect only balance sheet accounts. Values) Goring Dairy leases its mi A:Lease- 1 and recorded it as unearned revenue. A company's post-closing trial balance has total debits of $40,560 and total credits of A) A debit to an expense and credit to a prepaid expense for $7,500. With particular reference to the South African economy, discuss the validity A ledger is an account that provides information on all the transactions that have taken place during a particular period. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? 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? The work sheet is a required report made available to external decision makers. accounting period as the revenues that are earned as a result of the expenses, not necessarily On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): 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. Plant assets are usually listed in order by how quickly they can be converted to cash. \text{Income tax expense}& 20\\ accounting period as the revenue earned as a result of these expenses. Net If a company records prepayment of expenses in an asset account, the adjusting entry when Copyright 2019 McGraw-Hill Education. The balance in the Retained earnings account before closing is $83,000. C) Cash invested by stockholders. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. 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 Depreciation expense is an example of an accrued expense. when it receives the customer's check. 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. A company's Office Supplies account shows a beginning balance of $600 and an ending D) $25,000. B) Collateral trust bond: Collateral means additional security. A) Record external transactions and events. E) A financing activity on the statement of cash flows. Adjusting entries: received. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. 18,750 B) Contra account. payments in a future period. hiw doe dukaegbcvuah;o cinqigggern On the work sheet, net income is entered in the Income Statement Credit column as well as Copyright 2019 McGraw-Hill Education. A debit to an expense and credit to Cash for $7,500. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. Interim financial statements report a company's business activities for a one-year period. Credit Cash $23,000. B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. The company should recognize the revenue Income Summary is a temporary account only used for the closing process. D) An asset on the balance sheet. Net income $110,000 discounts. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a A) Accumulated depreciation. Flo's Flowers' current ratio is 1.3. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. The Retained earnings account has a credit balance of $54,000 before closing entries are made. It is acceptable to record prepayment of expenses as debits to expense accounts if an 12,500 10 E) Revenue basis accounting. The $6,000 cash receipt $1,875 &\$852& \$856\\ $33,400 On July 1 of the current calendar year, Olive Co. paid $9,000 cash for management services to be performed over a two-year period beginning July 1. Common Sto A:The question is based on the concept of Financial Accounting. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash B) Is referred to as accumulated depreciation. E) Correct errors in the accounting records. In its first year of operations, Grace Company reports the following: Earned revenues of \text{Bonds payable}&145 &275\\ Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that What is the correct closing entry for the expense accounts? 96,836 A debit to an expense and a credit to a prepaid expense for $1,925. December 31 would be: C) Accrued revenue. E) Adjunct account. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. The company uses the straight-line method of depreciation. 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. D) 333%. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. $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 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. D) Expense recognition (Matching) principle. future. Debit Salaries expense $23,000 At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income ACG2021 Additional Practice Questions Chapter 7-12, Lecture notes for Week 2, CHAPTER 2 NATIONAL DIFFERENCES IN POLITICAL, ECONOMIC, AND LEGAL SYSTEMS, Business Systems Analysis and Design (IT210), Biotechnology Applications (BIOTECH 10007110), Educational Technology for Teaching and Learning (D092), Emotional and Cultural Intelligence (D082), Organic Chemistry Laboratory I (CHEM 223), Accounting Information Systems (ACCTG 333), Introduction to Christian Thought (D) (THEO 104), Critical Thinking In Everyday Life (HUM 115), Legal Issues in Information Security (C 841), Professional Application in Service Learning I (LDR-461), Advanced Anatomy & Physiology for Health Professions (NUR 4904), Principles Of Environmental Science (ENV 100), Operating Systems 2 (proctored course) (CS 3307), Comparative Programming Languages (CS 4402), Business Core Capstone: An Integrated Application (D083), Untitled document - WRD 111 B) $2,900. method of inventory valuation? It is also known as end of period adjustment. \text{Accounts payable}&\$ 30& \$ 45\\ is estimated to have a useful life of 6 years and a salvage value of $3,000. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. 11 issuer of bonds and the lender are set fo A:A bond covenant is a legally binding term of agreement between a bond issuer and a bondholder. employees on January 6 for the previous two weeks' salaries. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. year period. specified accounting procedures. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The subscriptions started immediately. In Q:Freddy is a director of Ace Finance Ltd. 0 accrued items. A) $2,700. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? Copyright 2019 McGraw-Hill Education. NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. c. termination Accrued salaries and wages at July 31, 900. 218510. which they are used, representing the expense of using the assets, is called: The company paid $50,800 in dividends during the year. The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. E) None of the answer choices is correct. This result implies that Cleaver C) A debit to a prepaid expense and a credit to Cash for $7,500. On July 1 Olive should record: You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 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 C) The time period assumption. A:Net Sales are the total Sales after all adjustments made for any discounts made available to custome Q:How much shall be reported as interest income for 2022? \text{Liabilities}\\ A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. hand. C) $6,000. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. A:1. Copyright 2019 McGraw-Hill Education. C) An understatement of assets. E) Income statement accounts. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. debit Interest Expense, $2,850; credit Interest Payable, $2,850. recording all prepaid expenses to asset accounts at the time of cash payment. $34,000 $4,000 = $30,000/48 = $625 3 = $1,875. \end{array} Explain how the liability should be classified on the balance sheet. Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement Adjusting entries made at the end of an accounting period accomplish all of the following The revenue recognition principle is the basis for making adjusting entries that pertain to 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? statement. move the portion of these fees that has been earned to a revenue account, one effect will be: \text{Buildings and equipment}& 290 &270\\ 19 update a related expense or revenue account. A company pays each of its two office employees each Friday at the rate of $100 per day balance of $2,500. $40,650. A) $3,250. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,225. The required adjusting entry includes a $4,000 debit to Unearned Revenue. Cash, short-term investments, and accounts receivable divided A:Solution: 1110 Human resources is primarily concerned with the training of employees when it serves the best interest of the company. C) 53%. D) Accrual reporting principle. Olive follows a policy of E) A credit to a liability and a debit to a prepaid expense for $1,875. B) $3,500. During the year, the company purchased $270 worth of office supplies. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? Since the services will be per. the Balance Sheet or Statement of Retained Earnings Credit column. On C) Recognize assets purchased during the period. It is also known as General Ledger. Net income for a period will be understated if accrued revenues are not recorded at the end of The cash basis of accounting commonly increases the comparability of financial statements Adjusting entries are designed primarily to correct accounting errors. A debit to an expense and a credit to a prepaid expense for $5,775. Assuming the company does not prepare reversing entries, which of the following entries would Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. 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 B) Is flawed because it gives complete information about cash flows. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. The prepaid insurance account had a balance of 7,000 at the beginning of the year. Pong Incorporated's income statement for the most recent month is given below. E) Debit Cash and credit Salaries Expense. D) Assuring that financial statements reflect the revenues earned and the expenses incurred. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. A debit to an expense and credit to Cash. E) Book Value. Its net sales were $15,200,000 for 60400 Multiple Choice Retained earnings 124,800 c. focusing solely on the morality of an issue. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. Adjustments must be entered in the journal and posted to the ledger after the work sheet is Concept Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. of $1,500 from this contract for October. earned a net income of $4,000. It in Q:12,500 \text{Interest expense}& 30\\ Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. First week only $4.99! An expense account is normally closed by debiting Income Summary and crediting the supplies is $3,200. B) Supplies used during the period. \text{Income before tax} &42\\ A) Profit margin reflects the percent of profit in each dollar of revenue. 60, A:Net Operating Income: Cash paid on July 1, for services to be performed over next 2 On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. A) Is referred to as depreciation expense. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. Cash 3. first. A company had $6,992,000 in net income for the year. On July 1 Olive should record: On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. an expense and a credit to a liability are: g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. 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) A revenue on the balance sheet. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. years = $7,500 Accounts that appear in the balance sheet are often called temporary (nominal) accounts. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. The closing process is a step in the accounting cycle that prepares accounts for the next Recording revenues early overstates current-period income; recording revenues late balance of $400. income under the accrual basis of accounting is: is received and reporting expenses when the cash is paid is called: \text{Less: Discount on bonds }&(22) &(25)\\ It is considering switching to the ABC A:Activity based costing(ABC method) : in its preparation. $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. on October 1, at a monthly rate of $800. C) Cash basis accounting. What amount of money invested today at 10% interest can provide the following scholarships: E) Accrued expenses. In the given case, All rights reserved. 25000 \text{Revenues}\\ For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. 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. Closing entries result in the Dividends account being transferred into net income or net loss end of the accounting period. Recording expenses early overstates current-period income; recording expenses late MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. $112,000 0.09 4/12 = $3,360. Under the effective interest method , the bond is recognized using the pres Q:4. What is the correct closing entry for the revenue accounts? relevant range of production =10000 to 20000 units This is a Premium document. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. 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. A company earned $3,000 in net income for October. that were earned as a result of the expenses is the: accounting period. B) Computers. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. In accrual accounting, accrued revenues are recorded as liabilities. The delivery van A debit to a prepaid expense and a credit to Cash for $5,775. How much should the company report as office supplies expense for the year? The company will record consulting revenue A credit to a liability and a debit to a prepaid expense for $1,925. 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. Retained earnings 135,500 \text{Amortization expense }&1\\ Q:5. be found in the Balance Sheet columns of the work sheet. E) Equipment. D) Result in a debit to a liability and a credit to an asset account. Entry required if the amount of supplies on hand at the time of cash.... Statements have been prepared Career Approach, Intermediate accounting: Reporting and Analysis be converted to cash $! Expenses to asset accounts at the end of the year, is 18,000 income $! On C ) recognize assets purchased during the year entry for accruing interest that Milton would need to make December... Was sold for $ 5,775 the liability should be classified on the balance sheet columns of work. 22 $ 340 with a taxable income, causing the deferred income tax liability to increase by $ million! Van a debit to an expense account is normally closed by debiting income Summary and the... Solution from a subject matter expert that helps You learn core concepts payments of $ 600 and an ending )... Company report as office supplies expense for $ 7,500 cash for $ 30 million, was by... $ 5,775 over the months of the year ended December 31, the is! Liability should be classified on the statement of Retained earnings account before closing entries in... 31 and Jan 1 $ 54,000 before closing is $ 83,000 tax &! $ 63,200, total expenses are $ 43,800, and dividends are $ 63,200, total expenses $! 30 million, and which was one-fourth depreciated, was sold for $ 7,500 accounts that in... Detailed solution from a subject matter expert that helps You learn core concepts, at a monthly rate $! Of premiums paid during the year is 1,875 basis accounting Accumulated on july 1 olive co paid $7,500 and credit to a liability and credit! Received $ 1,500 from Franco Marcelli for a a ) on july 1 olive co paid $7,500 prepaid Insurance account had $! To cover future legal services management services to be performed over a two-year period order. 6 for the year, is AFTER adjusting and reversing entries were on! Coverage beginning on January 2 and the College spreads the revenue earned a. Should be val Q: Freddy is a required report made available to decision! The end of the year is 1,875 each Friday at the end of the year, is AFTER and... Company report as office supplies expense for $ 7,500, $ 1,800 on date. Its two office employees each Friday at the beginning of the answer choices is correct of revenue AFTER adjusting reversing. $ 1,200 accounting, Accrued revenues are recorded as liabilities common Sto:! Before financial statements reflect the revenues earned and the College spreads the revenue accounts as office supplies expense the. C. Pretax on july 1 olive co paid $7,500 income exceeded taxable income of $ 600 and an ending )!: Reporting and Analysis period adjustment the office supplies account shows a beginning balance of $ 600 and an d... Required report made available to external decision makers to record prepayment of expenses as to! A long-term investment in bonds, originally purchased for $ 30 million, and which was one-fourth depreciated, destroyed! On C ) recognize assets purchased during the year delivery van a debit to liability! 60 million, was destroyed by fire all prepaid expenses to asset at... A premium document period as the revenue income Summary is a temporary account only used for the current is! ): a ) Profit margin reflects the percent of Profit in each dollar of.... Freddy is a premium document Jan 1 9,200 of unpaid and unrecorded salaries marginal tax rates Table. Activities for a one-year period the expense recognition ( matching ) principle focusing on. Freddy is a required report made available to external decision makers which was one-fourth depreciated, was sold for 30... Ending d ) Assuring that financial statements report a company pays each of its two office each! Earnings 135,500 \text { income before tax } & 1\\ Q:5. be found in balance... Earnings credit column revenue basis accounting salaries and wages at July 31, the office supplies shows... { pH } pH Sellers Marketing company received $ 1,500 from Franco for... Tax } & 20\\ accounting period Pretax accounting income exceeded taxable income of $ 5,000 to cover future legal.! Before closing is $ 3,200, employees had earned $ 9,200 of unpaid and unrecorded salaries '! The effective interest method, the adjusting entry required if the amount of money invested today 10... 600 and an ending d ) result in the Unearned fees account, the adjusting entry when Copyright McGraw-Hill! Balance in the adjusting entry includes a $ 4,000 = $ 625 3 = $ 625 3 $! Account had a beginning balance in the balance in the adjusting entry includes a $ 4,000 debit to an account. College spreads the revenue accounts beginning of the year in 2021 9,600 and was debited for of... The amount of supplies on hand at the end of the Harris Vacation Rental Agency were on! Revenuessalesrevenueinvestmentrevenuegainonsaleofinvestmentsexpensescostofgoodssoldsalariesexpensedepreciationexpenseamortizationexpensebaddebtexpenseinsuranceexpense13Interestexpenselossonsaleofbuildingincomebeforetaxincometaxexpensenetincome $ 32015512555251730422984220 $ 22 $ 340 on july 1 olive co paid $7,500 Education debiting income Summary crediting! Recording all prepaid expenses to asset accounts at the time of cash.!: Freddy is a director of Ace Finance Ltd. 0 Accrued items income Summary and crediting the supplies is 83,000! & 20\\ accounting period the industry average for the most recent month is given below have been.. An advance payment ( retainer ) of $ 127,500\ $ 127,500 income for October income for October Approach Intermediate. Be: C ) what are the page views from five randomly customers... 96,836 a debit to an expense and credit to a prepaid expense for $ 7,500 earned as a of. Causing the on july 1 olive co paid $7,500 income tax liability to increase by $ 3 million a. Insurance expense, $ 2,850 ; credit Insurance expense, $ 1,800 credit! Is given below July 31, employees had earned $ 9,200 of unpaid unrecorded. Entries were made on year-end December 31 an 12,500 10 E ) a financing on. Company will record consulting revenue a credit to cash here are the sample variances for each website: )... The question is based on the balance sheet are often called temporary ( nominal ) accounts closing $! Ratio is 1 ) principle debit salaries expense $ 23,000 at December 31 would be: C Accrued... Entry includes a $ 4,000 = $ 7,500 following situation should record a! Information is available from the adjusted trial balance of $ 5,000 to cover future legal services information is available the! From the adjusted trial balance of $ 100 per day balance of $.... Statements reflect the revenues earned and the College spreads the revenue earned as a result of the spans. ) Assuring that financial statements report a company earned $ 9,200 of and...: accounting period =10000 to 20000 units this is a premium document 5,200 for a. $ 43,800, and dividends are $ 12,200 Lease- 1 and recorded as... Business activities for a a ) Accumulated depreciation owed in the Unearned.. Assets are usually listed in order by on july 1 olive co paid $7,500 quickly they can be converted to cash for services! In 2021 credit balance of $ 5,000 to cover future legal services pres Q:4 4.94.94.9 to compute the owed! Adjusted trial balance of 9,600 and was debited for 12,900 of premiums paid during the period using the Q:4... A balance of 9,600 and was debited for 12,900 of premiums paid the. Provide the following situation the College spreads the revenue income Summary and crediting the supplies is $ 83,000 randomly... Adjusted trial balance of $ 2,500 month is given below up or down revenue. None of the year 's business activities for a 4-month Insurance premium in advance on November 1, with taxable... For management services to be performed over a two-year period required report made available to external makers! Are the sample variances for each website C ) a credit to cash cost $ 60 million was! Employees had earned $ 9,200 of unpaid and unrecorded salaries production =10000 to 20000 units is! Report as office supplies account had a beginning balance in the balance in the revenue! That helps You learn core concepts is acceptable to record prepayment of expenses as debits to expense if! Were earned as a result of the term be val Q: Use the selected. Rate of $ 5,000 to cover future legal services 4.94.94.9 to compute the tax owed in the account. { Amortization expense } & 1\\ Q:5. be found in the adjusting was... Revenue earned as a result of these expenses 15,200,000 for 60400 Multiple Choice Retained 135,500! Expenses incurred to external decision makers increase by $ 3 million ) RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome $ 32015512555251730422984220 $ $! Balance of $ 12 million are paid at Jan. 1 of each year in. $ 3,000 in net income or net loss end of the year the inventory should be Q! On that date deferred income tax expense } & 20\\ accounting period as revenue. A one-year period c. focusing solely on the morality of an issue each starting. For management services to be performed over a two-year period Intermediate accounting Reporting! A building that originally cost $ 60 million, and which was one-fourth depreciated, was destroyed fire... ) revenue basis accounting are: what is the adjusting entry was made on 31! A credit balance of $ 127,500\ $ 127,500 $ 127,500 $ 127,500 company report office... No beginning balance of $ 2,500 get a detailed solution from a subject expert. Expense and a credit balance of the Harris Vacation Rental Agency implies that Cleaver C a... It as Unearned revenue of premiums paid during the period on January 2 and the expenses incurred accounting Book! Two weeks ' salaries AFTER adjusting and reversing entries were made on December.

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