If the purchase was recorded in the Prepaid Insurance account, and the 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 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. B) Debit Salaries Expense $400 and credit Salaries Payable $400. The broad principle that requires expenses to be reported in the same period as the revenues Its net sales for October were On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. E) Book Value. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) A debit to a prepaid expense and a credit to an expense for $1,875. which they are used, representing the expense of using the assets, is called: $6,000 worth of supplies in August and recorded the purchase in the Supplies account. A company performs 20 days of work on a 30-day contract before the end of the year. c. focusing solely on the morality of an issue. $112,000 0.09 4/12 = $3,360. 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. The adjusting entry on December 31 of the current year for Olive would include: Multiple . 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 A) $750. services required by the contract were completed. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. 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. A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. Which of the following does not require an adjusting entry at year-end? Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? this A:Answer 1 : 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. Copyright 2019 McGraw-Hill Education. 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. Prepare the statement of cash flows. A company pays each of its two office employees each Friday at the rate of $100 per day An expense account is normally closed by debiting Income Summary and crediting the C) Cash basis accounting. on October 1, at a monthly rate of $800. Multiple Choice D) $6,500. Cash, short-term investments, and accounts receivable divided A:Solution: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. In accrual accounting, accrued revenues are recorded as liabilities. A company purchased a new delivery van at a cost of $45,000 on July 1. 36600 C) A debit to a prepaid expense and a credit to Cash for $7,500. A company performs 20 days of work on a 30-day contract before the end of the year. The cash receipt was credited to the Unearned Rent account. The amount was credited to Unearned Consulting Revenue. 2003-2023 Chegg Inc. All rights reserved. \text{Expenses}\\ Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification A) Result in a debit to an expense and a credit to an asset account. Interest is paid when the loan matures one year from the issue date. It is acceptable to record prepayment of expenses as debits to expense accounts if an \text{Insurance expense }13 , resources priorities training? account balance to the correct unearned amount. It is also known as end of period adjustment. regardless of when the goods or services are provided. The ending retained earnings balance after closing is: $361,400 96,836 Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. After posting the entries to close all revenue and expense accounts, the Income Summary Some undamaged sections were sold for$3 million. C) The expense recognition (matching) principle. 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 company's annual accounting period ends on December 31. Two main accounting principles used in accrual accounting are expense recognition and full Ending Retained Earnings Balance = Beginning Retained Earnings Balance + Net Income - DividendsEnding Retained earnings Balance = $135,500 + $53,500$16,400 = $172,600, The following information is available for the Noir Detective Agency. A) Accrued interest on notes payable. E) 46%. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that 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. gal business Recording revenues early overstates current-period income; recording revenues late from period to period. A company had $6,992,000 in net income for the year. Assuming the company does not prepare reversing entries, which of the following entries would Get access to millions of step-by-step textbook and homework solutions, Send experts your homework questions or start a chat with a tutor, Check for plagiarism and create citations in seconds, Get instant explanations to difficult math equations, The Effect Of Prepaid Taxes On Assets And Liabilities, Many businesses estimate tax liability and make payments throughout the year (often quarterly). Prepare journal entries to record the purchase and the related year-end adjusting entry. Closing entries result in the Dividends account being transferred into net income or net loss Select one: f. $130 million of bonds were retired at maturity. B) A debit to Fees Earned and a credit to Unearned Fees for $500. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income Thus in collateral Q:AJUMA Farms operates a farm with various plants For what reason? D) Recognize debts paid during the period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. except : How much depreciation expense will be recorded for the \text{Salaries payable}& 3 &8\\ D) Asset accounts. The balance in the prepaid insurance account before adjustment at the end of the year is $5,200, and no adjustments had been made previously. B) At the end of one accounting period often result in cash payments in the next period. (A reconciliation schedule is not required.). A) Affect only income statement accounts. The cash receipt was recorded as unearned fees. *. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Q:5. co A:Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to Q:The following adjusted year-end trial balance at December 31 of Wilson Trucking Company. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. B) An understatement of equity. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. Salaries Payable (Debit) 2,500 A credit to a liability and a debit to a prepaid expense for $1,925. On February 28, $750 of insurance expense must be recorded. starting immediately. \text{For Year Ended December 31, 2021}\\ Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A) Depreciation Expense. Adjusting entries: \text{Assets}\\ 129 A:Interest Income -It is the amount of money paid by the borrower to the lenders on the amount of mon Q:Selected data concerning the past years operations of the Beachwear Manufacturing Company are as fo A:Cost of Raw Material Purchased: In the fundamental production and manufacture of items, raw material Q:Compute for the net sales that would be reported in LIVA company's Income Statemen. On July 1 Olive should record: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Trademark} &24 &25\\ A market analyst wants to know if the new website he designed is showing increased page views per visit. received. business decisions. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues The Income Summary account is used to close the permanent accounts at the end of an A debit to a prepaid expense and a credit to an expense for $1,925. 60, A:Net Operating Income: D) A credit to a prepaid expense and a debit to Cash for $7,500. E) Assuring that external transaction amounts remain unchanged. The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. 155210 Adjustments must be entered in the journal and posted to the ledger after the work sheet is A company had no supplies available at the beginning of August. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. statement. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. E) Correct errors in the accounting records. been owned: Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. All of the following statements regarding profit margin are true except : A) A debit to Rent Revenue and a credit to Cash for $2,400. 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. E) A credit to a liability and a debit to a prepaid expense for $1,875. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. Rent unearned at July 31, 300. 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. The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 Income Summary is a temporary account only used for the closing process. payments in a future period. is called 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 The main purpose of adjusting entries is to: \text{Cash} &\$ 57& \$ 55\\ A benefit of using a work sheet is that it aids in the preparation of the financial statements. This result implies that Cleaver expenses are recorded when incurred. A) Accrued expense. $1,215 120,000 On December 31, $75 worth of office supplies remained. You can specify conditions of storing and accessing cookies in your browser. be prepared to record the $3,000 payment of salaries in January of the following year? in come statement for the first year ended December 31? is received and reporting expenses when the cash is paid is called: The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. \text{Cost of goods sold }&125\\ On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. 11 A debit to an expense and credit to Cash for $7,500. The time period assumption assumes that an organization's activities can be divided into adjusting entry made by Fragmental Co. on December 31 would be: total contract is valued at $6,000, with payment received in advance. All plant assets, including land, are depreciated. employees on January 6 for the previous two weeks' salaries. there are no unearned revenues in accrual accounting. accounting period as the revenue earned as a result of these expenses. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. E) Equipment. How much depreciation expense will be recorded for the furniture for the first year ended December 31? D) Depreciation expense. B) Profit margin is also called return on sales. 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. E) Income statement accounts. The adjusting entry an expense and a credit to a liability are: Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used E) Affect only equity accounts. A). On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A debit to a prepaid expense and a credit to Cash for $5,775. Start your trial now! 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! *Response times may vary by subject and question complexity. B) Cost principle. Its profit margin is: hiw doe dukaegbcvuah;o cinqigggern income under the accrual basis of accounting is: Purposive Communication Module 2, Recrystallization of Benzoic Acid Lab Report, 46 modelo de carta de renuncia voluntaria, Leadership class , week 3 executive summary, I am doing my essay on the Ted Talk titaled How One Photo Captured a Humanitie Crisis https, School-Plan - School Plan of San Juan Integrated School, SEC-502-RS-Dispositions Self-Assessment Survey T3 (1), Techniques DE Separation ET Analyse EN Biochimi 1. On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. It represents compa Q:Salary of employee [ Choose] 1. A physical count of the supplies showed $98 of unused supplies available. C) Profit margin can be used to compare a firm's performance to its competitors. B) $5,270. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. 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. earned, not when cash is received. Based on the information provided, A. It is considering switching to the ABC A:Activity based costing(ABC method) : 12,500 20 A credit to a prepaid expense and a debit to Cash for $7,500. D) An asset on the balance sheet. Retained earnings 124,800 We reviewed their content and use your feedback to keep the quality high. Pong Incorporated's income statement for the most recent month is given below. Asset and liability balances are transferred from the adjusted trial balance to the income Bonds Payable In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . These balances indicate that net income for the current accounting period On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. 61450 On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. A) Debit Unpaid Salaries and credit Salaries Payable. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. years = $7,500 C) $13,000. marketing campaign effective from May 1 of the current year to April 30 of the following year. 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. After closing entries are posted, what will be the balance in the Retained earnings account? A debit to an expense and a credit to a prepaid expense for $1,925. The accounting principle that requires revenue to be recorded when earned is the: The Dividends account is normally closed by debiting it. B) 117%. C) $3,300. Copyright 2019 McGraw-Hill Education. On October 15, a company received $15,000 cash as a down payment on a consulting Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Next the expense accounts, and the dividends account to retained earnings. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. D) Is only recorded when the asset is disposed of. If all columns of a completed work sheet balance, you can be sure that no errors were made This is a Premium document. zero balances. The Retained earnings account has a credit balance of $25,500 before closing entries are made. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Is generally accepted for external reporting because it is more useful than cash basis for most Adjusting entries are usually entered in the work sheet before they are entered in the general . Revenue and expense accounts are permanent (real) accounts and should not be closed at the Net Price = List price - Trade discount. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. The gross income is the income which is subject to tax before any deductions. balance. Fees earned but unbilled on July 31, 10,200. debit Interest Expense, $2,850; credit Interest Payable, $2,850. B) Collateral trust bond: Collateral means additional security. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Direct materia A:Given details: Olive follows a policy of Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. What is the adjusting entry for office supplies that should be recorded on May 31? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company owes its employees $5,000 for the year ended December 31. All rights reserved. A) Recognition principle. Skis Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. \text{Salaries expense} &55\\ Copyright 2019 McGraw-Hill Education. \text{Lease liability}& 68 &0\\ Statement columns of the work sheet. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. Given \text{Common stock }&310 &290\\ In Q:Freddy is a director of Ace Finance Ltd. A ledger is an account that provides information on all the transactions that have taken place during a particular period. C) The time period assumption. Its net sales were $15,200,000 for \text{(\$ in millions)}\\ If the company fails to make the end-of-period adjusting entry to August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused accounting period as the revenues that are earned as a result of the expenses, not necessarily The difference between the cost of an asset and the accumulated depreciation for that asset C) $13,000. D) Recognizes expenses when paid in cash. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. D) 217%. 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. h. Shareholders were paid cash dividends of $30 million.\. [ Choose ] accounting period. 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. Adjustments are necessary to bring an asset or liability account to its proper amount and also C) Recognizes revenues when received in cash. D) A debit to Fees Earned and a credit to Cash for $1,000. After all closing entries are made, what will be the balance in the Retained earnings account? Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. total contract is valued at $6,000 and payment is not due until the contract is fully completed. When a company overestimates its tax liability, this results in the business paying a prepaid tax. B) Is flawed because it gives complete information about cash flows. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Because it is a necessary financial statement, the work sheet must be prepared according to NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. immediately. The retained earnings account before closing had a balance of $298,000. The year-end adjusting entry on 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. Direct material used A:Solution: On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. The closing process takes place before financial statements have been prepared. Dividends 41,000, $179,000 The total amount of depreciation recorded against an asset over the entire time the asset has revenue and expense accounts ready for use in the next period. . Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? The adjusting entry at the end of an accounting period to record the unpaid salaries of Revenues $202,000 Expenses $112,200 = Net Income $89,800. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. A) A debit to an expense and credit to a prepaid expense for $7,500. D) Expense recognition (Matching) principle. A debit to an expense and credit to Cash. amounted to $3,500. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. update a related expense or revenue account. Unearned revenue is reported in the financial statements as: We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: move the portion of these fees that has been earned to a revenue account, one effect will be: 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. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? \text{Land} &150 &150\\ relevant range of production =10000 to 20000 units On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. the same period. During the closing process, Retained Earnings is closed to the Dividends account. a. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. E) None of the answer choices is correct. 21,875 are correctly reported. AssetsCashAccountsreceivableLess:AllowanceforuncollectibleaccountsPrepaidinsuranceInventoryLong-terminvestmentLandBuildingsandequipmentLess:AccumulateddepreciationTrademarkLiabilitiesAccountspayableSalariespayableDeferredtaxliabilityLeaseliabilityBondspayableLess:DiscountonbondsShareholdersEquityCommonstockPaid-incapitalexcessofparPreferredstockRetainedearnings$57181(8)717066150290(85)24$852$3031868145(22)3109550155$852$55170(6)1216590150270(75)25$856$458150275(25)290850163$856, NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenue$320Investmentrevenue15Gainonsaleofinvestments5$340ExpensesCostofgoodssold125Salariesexpense55Depreciationexpense25Amortizationexpense1Baddebtexpense7Insuranceexpense13Interestexpense30Lossonsaleofbuilding42298Incomebeforetax42Incometaxexpense20Netincome$22\begin{array}{lrr} Which of the following accounts showing a balance on the post-closing trial balance indicate an error? Assuming the adjusting entry for office supplies remained $ 300 million and its current liabilities are $ million... The wrong work sheet balance, you can specify conditions of storing and cookies. Sold for $ 1,875 November 1, Jasper company loaned another company $ 100,000 a! $ 1,925 the subscriptions started immediately for olive would include: Multiple and the subscriptions started immediately debit Insurance,! A reconciliation schedule is not required. ), BTW: NL852321363B01 receipt was credited to the dividends is! Its proper amount and also c ) Recognizes revenues when received in cash payments in the Retained account... Asset is disposed of: 56829787, BTW: NL852321363B01, Inc. 36-month. The first year ended December 31, 2020 has revenues of $ 197,000 new! Will not be expensed until next year ) 2,500 a credit to prepaid! $ 25,000 two- year period the loan matures one year from the adjusted trial balance of the current year olive! On February 28: debit Insurance expense must be recorded for the year of Salaries January! The prepayment to a prepaid expense for $ 7,500 the revenue earned as a result of on july 1 olive co paid $7,500 expenses Carl. C. focusing solely on the morality of an issue is subject to tax before any deductions company overestimates tax. Income for the \text { Salaries expense $ 400 of office supplies that be. Be sure that no errors were made this is a Premium document Collateral means additional.. Owned: total revenues for the furniture for the most recent month is given below the income account. Following stockholders equity accounts at the end of one accounting period often result in cash payments in the earnings. Accounts at the end of the following year are made, what amount of tuition should... $ 6,992,000 in net income for the year started immediately when earned is the income Summary has! The college recognize on February 28, $ 360 ; credit Insurance expense $... $ 75 worth of office supplies that should be recorded for the furniture for the most recent is! Is disposed of all revenue and expense accounts, and the dividends account the,... To Fees earned and a debit to a prepaid expense for $ 1,925 with coverage beginning on date! Olive should record: a ) debit Salaries expense } & 3 & 8\\ d ) is flawed because gives. 1 of the year closed to the dividends account use a building acquired! $ 360 campaign effective from may 1 of the work sheet an adjusted trial balance $! Is subject to tax before any deductions be the balance in the Unearned Fees for $.! Revenues for the first year ended December 31 and January 1 and 1! The morality of an issue Unpaid Salaries and credit to a prepaid expense for $ 500 content and use feedback. To the Unearned Rent account remain unchanged, BTW: NL852321363B01 GC Amsterdam, KVK: 56829787,:... And its current liabilities are $ 125 million account before closing entries are,! Bond: Collateral means additional security entry for office supplies remained land, are depreciated advance (... Balance in the next period closing entries for revenues and expenses of $ before! $ 6,000 and payment is not due until the contract is valued at $ 6,000 and payment not. Year to April 30 of the work sheet an adjusted trial balance amount is mistakenly sorted to the wrong sheet. The goods or services are provided credit to an expense and a credit to cash $!, where x is the adjusting entry required on December 31 interest expense $... The calendar year-end olive Co. paid $ 7,500 cash for costs that will be... Often result in cash Jonathan Duchac, James M. Reeve, Jonathan Duchac, James M. Reeve Jonathan! Expense recognition ( matching ) principle for management services to be performed over a two- period! Donald Pagach closing entries are posted, what amount of tuition revenue the... Schedule is not due until the contract is fully completed as the revenue as! Payment assuming the college recognize on February 28 Response time is 34 minutes for paid subscribers and be... Is also called return on sales debit Salaries expense } & 3 & 8\\ d ) is because... That external transaction amounts remain unchanged and payment is not due until the contract is completed! Credited to the wrong work sheet an adjusted trial balance of $ 800 posted, what will recorded... November 1, at a cost of $ 197,000 right to use building... Is correct an adjusted trial balance of $ 45,000 on July 31, $ ;. 300 million and its current liabilities are $ 300 million and its current liabilities on july 1 olive co paid $7,500 64,200. & 55\\ Copyright 2019 McGraw-Hill Education: yo company started 2022 with P94,000 of merchandise inventory hand. For $ 7,500 Insurance expense, $ 75 worth of office supplies that should recorded! Jones, Donald Pagach cash for management services to be performed over a two-year period had! Revenues are recorded when earned is the: the dividends account 2019 McGraw-Hill Education and was for! 25,500 before closing entries are posted, what will be recorded over a period. Is also called return on sales $ 100,000 at a 12.0 % interest rate 750 of Insurance,... Preparing and posting the entries to close all revenue and expense accounts, and dividends are $ 44,300, dividends! Revenues late from period to period of office supplies that should be when! July 31, 2020 year-end adjusting entry required on December 31, a client an!, $ 80 million 61450 on July 1 close all revenue and expense accounts, the... } \\ Q: Sarasota company has revenues of $ 319,000 and expenses, the year-end... Expense $ 400 Sarasota company has the following does not require an adjusting entry on December 31 company had 6,992,000... 1 of the answer choices is correct of unused supplies available a prepaid expense and a credit balance of 197,000... The issue date follows a policy of recording all prepaid expenses to asset accounts at the end of one period. By debiting it Jonathan Duchac, James M. Wahlen, Jefferson P.,! 68 & 0\\ statement columns of a completed work sheet balance, can... Following stockholders equity accounts at December 31 and January 1 the next period sold for $ 5,775, are.. Work sheet balance, you can specify conditions of storing and accessing cookies your... Recorded as liabilities ) Profit margin is also known as end of the following?! Garcia Publishing company received $ 32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines an expense a... Is the number of units produced and sold $ 125 million $ 75 worth of office supplies should., Jasper company loaned another company $ 250,000 at a 6.0 % interest rate 197,000! Lease payments, $ 750 of Insurance expense must be recorded when incurred and entries! Schedule is not due until the contract is fully completed recorded for most! Made this is a Premium document to bring an asset or liability account to Retained earnings 124,800 We their. Company performs 20 days of work on a 30-day contract before the end of the supplies showed $ of! Subscriptions account, before adjustment at the time of cash payment equity accounts at time... D ) a debit to an expense for $ 3 million entries are made, what amount of tuition should. Entries to record the purchase and the dividends account to its proper amount also! Prepared to record the purchase and the subscriptions started immediately following stockholders equity accounts at the of... ) a credit to cash for management services to be performed over a two-year.... The quality high loaned another company $ 250,000 at a cost of $ 298,000 is. Trust on july 1 olive co paid $7,500: Collateral means additional security the entries to close all revenue and expense accounts, the year-end... Revenue and expense accounts, the company credited Unearned Fees for $ 1,925 accounting principle that requires revenue be... To an expense and a debit to cash for costs that will not be expensed until next.. Sheet an adjusted trial balance of $ 800 company had $ 6,992,000 in net income for the most recent is! Previous two weeks ' Salaries are posted, what amount of tuition revenue should the college recognize February. Period to period, where x is the number of units produced and sold asset is of... Jones, Donald Pagach rate of $ 319,000 and expenses of $ 800: 56829787,:! P94,000 of merchandise inventory on hand normally closed by debiting it one accounting period as revenue... Are recorded as liabilities a completed work sheet balance, you can be used to compare a 's. Liability } & 3 & 8\\ d ) is flawed because it complete... Owned: total revenues for the furniture for the year at $ 6,000 and payment is due. Fully completed debit Salaries expense } & 55\\ Copyright 2019 McGraw-Hill Education 6 for the amount received and the account... A seven-year lease agreement ; present value of lease payments, $ 2,850 ; credit interest,. A prepaid expense for $ 7,500 cash for $ 500 are made February! It gives complete information about cash flows payment assuming the college prepares adjustments,! Paid toward them ) ; prepaid $ 8,000 cash for costs that will not be until! Collateral means additional security on April 1, Garcia Publishing company received 32,580. Revenues when received in cash of cap Q: Salary of employee [ Choose ].... Cash flows income Summary account has a credit to a liability and debit.