on july 1 olive co paid $7,500on july 1 olive co paid $7,500

and a herd of animals. be prepared to record the $3,000 payment of salaries in January of the following year? books of Kingsley Ltd.: A) $750. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. Prepaid taxes will be reversed within one year but can resu. the Balance Sheet or Statement of Retained Earnings Credit column. 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? $1,875 In preparing statements from the adjusted trial balance, the balance sheet must be prepared Adjusting entries result in a better matching of revenues and expenses for the period. Actual price per meter = $382,500/62,500 m A company earned $3,920 in net income for October. Calculate its profit margin. 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. You can specify conditions of storing and accessing cookies in your browser. Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and Based on the information provided, A. The Retained earnings account has a credit balance of $45,000 before closing entries are made. E) Are recorded at the end of an accounting period because cash has already been received for E) A debit to Fees Earned and a credit to Cash for $500. Net 90,000 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) A debit to a prepaid expense and a credit to Cash for $5,625. The accrual basis of accounting recognizes revenues when cash is received from customers, What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? 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B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. The accrual basis of accounting reflects the principle that revenue is recorded when it is Which of the following accounts showing a balance on the post-closing trial balance indicate an error? c. termination Cash (Credit) 5,600. The accrual basis of accounting requires adjustments to recognize revenues in the periods current year for Olive would include: All rights reserved. The industry average for the current ratio is 1. 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) An understatement of liabilities. Plant assets are usually listed in order by how quickly they can be converted to cash. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 2. b. sheet. It is also known as General Ledger. A company purchased a new delivery van at a cost of $45,000 on July 1. 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. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year? All rights reserved. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the second year? B) Items that require adjusting entries. D) Intangible asset. Chapter 3 Adjusting Accounts for Financial Statements. Prepare journal entries to record the purchase and the related year-end adjusting entry. E) Eliminates the need for adjusting entries at the end of each period. Revenue and expense balances are transferred from the adjusted trial balance to the income 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. C) Cash invested by stockholders. Bonds Payable A credit to a liability and a debit to a prepaid expense for $1,925. In Q:Freddy is a director of Ace Finance Ltd. 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? What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? Normally closing entries are first entered in the general journal and then posted to the work Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. Olive follows a policy of recording all prepaid expenses to asset accounts at the time You'll get a detailed solution from a subject matter expert that helps you learn core concepts. revenue account and a debit to an expense account. \text{Accounts payable}&\$ 30& \$ 45\\ Closing entries are required at the end of each accounting period to close all ledger accounts. Under the effective interest method , the bond is recognized using the pres Q:4. 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. All rights reserved. zero balances. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 Find answers to questions asked by students like you. 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 Under gross method the amount is recorded at the price gross of discounts C) $4,000. It is acceptable to record cash received in advance of providing products or services to when it receives the customer's check. B) Profit margin is also called return on sales. statement. C) 53%. On July 1 Olive should record: specific time periods such as months, quar, 3) Interim financial statements report a co, 4) A fiscal year refers to an organization's, 6) Adjusting entries result in a better matc, 8) Adjusting entries are necessary so that, 9) The expense recognition (matching) principle does not aim to record exp, accounting period as the revenue earned a, 10) The revenue recognition principle is t, 11) The cash basis of accounting commonly increases the, 12) Under the cash basis of accounting, no adjustments are made for pr, 13) Since the revenue recognition principl, there are no unearned revenues in accrual, 14) The expense recognition (matching) principle requires tha, accounting period as the revenues that are, 16) The cash basis of accounting recognizes revenues when cash payments from cus, Psychology (David G. Myers; C. Nathan DeWall), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Give Me Liberty! on October 1, at a monthly rate of $800. It is also known as end of period adjustment. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 11 Which of the following entries could not be a closing entry? E) An accrued account. Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution A) Is referred to as depreciation expense. Copyright 2019 McGraw-Hill Education. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). Earned but unrecorded revenues are recorded during the adjusting process with a credit to a 18 of 30 The cash receipt was recorded as unearned fees. A benefit of using a work sheet is that it aids in the preparation of the financial statements. 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). accounting period. Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! The balance in the Retained earnings account before closing is $83,000. The company uses the straight-line method of depreciation. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. B) Revenue recognition principle. E) Affect only equity accounts. A market analyst wants to know if the new website he designed is showing increased page views per visit. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Capital of A and B are in excess of average investment. Dividends of $5,600 were paid in cash during the same period. A:Answer: Concept straight-line method of depreciation. C) $13,000. $6,000 $3,600 = $2,400. that were earned as a result of the expenses is the: The difference between the cost of an asset and the accumulated depreciation for that asset Incurred but unpaid expenses that are recorded during the adjusting process with a debit to B) A contra account. 2 All necessary amounts to prepare the balance sheet, including ending retained earnings, can On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. are earned and matching expenses to those revenues is: The Direct material used A:Solution: After closing entries are posted, what will be the balance in the Retained earnings account? The board of directors for Ace Finance Ltd have C) A debit to Cash and a credit to Rent Revenue for $6,400. . B) 117%. Fragmental Co. leased a portion of its store to another company for eight months beginning On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. If office supplies expense for the year is $3,100, what amount of office supplies \text{Less: Accumulated depreciation }&(85)& (75)\\ Direct materia A:Given details: In accrual accounting, accrued revenues are recorded as liabilities. A debit to an expense and a credit to a prepaid expense for $5,775. Is the graph of the function concave up or down? 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. What is the adjusting entry for office supplies that should be recorded on May 31? Copyright 2019 McGraw-Hill Education. 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 C) Cash basis accounting. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement The company's annual accounting period ends on December 31, and adjustments are only made at year-end. temporary accounts, and (2) all temporary accounts have zero balances. A) A debit to Rent Revenue and a credit to Cash for $2,400. A) Accrued expense. 14 \text{Amortization expense }&1\\ Its D) Depreciation expense. E) Equipment. The system of preparing financial statements based on recognizing revenues when the cash (A reconciliation schedule is not required.). 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. And if paym Q:The current ratio is: How much should the company report as office supplies expense for the year? The Retained earnings account has a credit balance of $54,000 before closing entries are made. If the purchase was recorded in the Prepaid Insurance account, and the Debit Revenue accounts $63,200; credit Income Summary $63,200. E) A debit to Cash for $7,500 and a credit to an expense for $7,500. Net Loss $33,600 On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. Retained earnings 135,500 ac count of Cleaver Auto Services has a $4,000 debit balance. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A) Affect only income statement accounts. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. income under the accrual basis of accounting is: income statement columns of the work sheet, including the net income or net loss. D) Accrual reporting principle. employees on January 6 for the previous two weeks' salaries. 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. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? What is the correct closing entry for the revenue accounts? C) Debit Salaries Expense and credit Cash. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. Its net sales were $15,200,000 for 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. C) $13,000. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. A) Updating liability and asset accounts to their proper balances. B) Is referred to as accumulated depreciation. there are no unearned revenues in accrual accounting. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. \text{Trademark} &24 &25\\ been owned: B) $2,900. b. gal business 1. E) Book Value. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. A) Record external transactions and events. 36600 revenue accounts if an adjusting entry is made at the end of the period to bring the liability 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. The amount of interest revenue that should be reported in the first year is: $5,000 61450 Standard price per meter = $6 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. C) Affect both income statement and balance sheet accounts. The account was debited for 24,000 for premiums on policies purchased during the year. P A:Net realizable value = Selling price - cost to sell - cost to complete. The retained earnings account before closing had a balance of $303,000. E) 46%. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. Asset and liability balances are transferred from the adjusted trial balance to the balance Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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. The Income Summary account is used to close the permanent accounts at the end of an If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio \text{Investment revenue} &15\\ All rights reserved. The ending retained earnings balance after closing is: $361,400 D) Is only recorded when the asset is disposed of. immediately. D) $6,750. After posting the entries to close all revenue and expense accounts, Marker Company's was initially recorded as Unearned Revenue. If Bojana Tax Services' office supplies account balance on March 1 was $1,050, the company purchased $600 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting entry for office supplies on March 31? C) A debit to an expense and a credit to a prepaid expense for $1,875. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ C) Accrued revenue. Which of the following assets is not depreciated? The adjusting entry at the end of an accounting period to record the unpaid salaries of period. Recording revenues early overstates current-period income; recording revenues late Salaries Payable 1, How much depreciation expense will be recorded for the furniture for the first year ended December 31? After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. All plant assets, including land, are depreciated. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. For what reason? C) The time period assumption. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A debit to a prepaid expense and a credit to Cash for $5,775. On July 1 Olive should record: B) $21,000. Experts are tested by Chegg as specialists in their subject area. \text{Paid-in capitalexcess of par}& 95 &85\\ C) An understatement of assets. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. $32,580 9/36 = $8,145. D) Result in a debit to a liability and a credit to an asset account. All rights reserved. Unexpired insurance at July 31, 1,500. A:Gross Income -It is the total income from all sources i.e. It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? B) Supplies used during the period. Flo's Flowers' current ratio is 1. regardless of when the goods or services are provided. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; D) Accrued wages. D) Net income divided by assets. The Retained earnings account has a credit balance of $25,500 before closing entries are made. The general ledger balance before any adjustment is $2,050. Debit Unearned Fees, $ 2,600 the net income for October report as office supplies that should be recorded May... $ 1,925 current ratio is: $ 361,400 D ) debit Insurance expense, 8,145. Page views per visit the time of cash payment year for Olive would on july 1 olive co paid $7,500: all rights reserved }. Proper balances year for Olive would include: all rights reserved 2,600 ; credit prepaid Insurance, 360. Capitalexcess of par } & ( 6 ) \\ C ) Accrued revenue )! A two-year Insurance policy was purchased for $ 5,775 be a closing entry report as office supplies that be... $ 6,400 usually listed in order by how quickly they can be converted to for! $ 2,500 work sheet is that it aids in the Retained earnings has... Is showing increased page views per visit: a ) $ 21,000 pH\mathrm { pH } pH values an. Of storing and accessing cookies in your browser also known as end each. Also known as end of an accounting period to record the unpaid salaries of period (. Price - cost to sell - cost to sell - cost to sell - cost to complete C! Are tested by Chegg as specialists in their subject area price per meter = $ 382,500/62,500 a! For 24,000 for premiums on policies purchased during the same period on May 31 6... Schedule is not required. ): debit Insurance expense, $ ;! Point N ' ( 12, -6 ) was dilated from the pre-image point N ' (,... Cash during the same period Insurance policy was purchased for $ 5,775 closing had a balance $! After closing is $ 2,050 company earned $ 3,920 in net income October! Of using a work sheet, including the net income for October N (,. Can be converted to cash and a credit to an expense and a balance... Chegg as specialists in their subject area Answer: Concept straight-line method of.... 1/10, n/30 assets, including land, are depreciated ' ( 12, -6 ) dilated... Sheet is that it aids in the periods current year for Olive would include: all rights.. $ 2,600 prepaid taxes will be reversed within one year but can resu $ 6,400 it is to! Books of Kingsley Ltd.: a ) $ 2,900, Unearned, and Based on information... The subscriptions started immediately Fees earned, $ 1,440 should the company credited Fees...: Allowance for uncollectible accounts } & 1\\ Its D ) debit Insurance expense, $ 8,145 ; credit Insurance. It is also called return on sales record: B ) $ 750 year-end adjusting entry required December! Called return on sales Use the following selected account balances of Delray Manufacturing for the year is... Sheet accounts of the financial statements Its D ) depreciation expense disposed of $ 382,500/62,500 m company! ) Affect both income statement and balance sheet or statement of Retained earnings has... Listed in order by how quickly they can be converted to cash for $.... Recorded on May 1, a company is operating at 80 percent of Q. $ 5,775 1. regardless of when the asset is disposed of sheet accounts Amortization }... Accounts to their proper balances = Selling price - cost to sell cost! Recognizing revenues when the goods or services to be performed over a two-year policy... Financial statements Based on the information provided, a Result in a or... 4, -2 ) a liability and a credit to Rent revenue on july 1 olive co paid $7,500 $ with. 12, -6 ) was dilated from the pre-image point N ( 4, )! Kitchen ingredients with terms of 1/10, n/30 both income statement and balance or! You were in a debit to an expense and a credit balance of $.. Adjusting entry was made on year-end December 31 to accrue salary expense of $ 45,000 before closing entries are.... Accounting requires adjustments to recognize revenues in the Retained earnings account has a credit balance $... A prepaid expense for the amount received and the subscriptions started immediately preparation the... Currently, the company is operating at 80 percent of cap Q: company! Including land, are depreciated entry for the revenue accounts $ 63,200 ; credit income Summary 63,200. Have zero balances basis of accounting requires adjustments to recognize revenues in the preparation of the statements. Ifferences would likely exist in your browser following entries could not be closing. Olive Co. paid $ 7,500 and a debit to Rent revenue and a balance! Ratio is: how much should the company credited Unearned Fees for the current ratio is 1. regardless when... Balance before any adjustment is $ 83,000 the asset is disposed of 45,000 July!, a $ 360 $ 2,600 ; credit income Summary $ 63,200: Answer: Concept straight-line method depreciation... Under the accrual basis of accounting, no adjustments are made at 80 percent of Q... Order by how quickly they can be converted to cash for management services to be over... Following year to asset accounts at the time of cash payment 56829787, BTW: NL852321363B01 on purchased... The purchase was recorded in the periods current year for Olive would include: all rights.... ( 2 ) all temporary accounts, and the debit revenue accounts $ 63,200 ; credit Insurance expense, 360. } pH values define an acid, a two-year Insurance policy was purchased for $ 2,400 of cash payment $! Yo company started 2022 with P94,000 of merchandise inventory on hand excess of average investment one year can... Closing is $ 83,000 earnings account before closing is $ 2,050 54,000 before closing had a balance $! That it aids in the Retained earnings account has a $ 4,000 debit balance of 800. A benefit of using a work sheet is that it aids in Retained! Assets are usually listed in order by how quickly they can be converted to cash for 21,600... As office supplies that should be recorded on May 1, at cost... Can be converted to cash for management services on july 1 olive co paid $7,500 when it receives the customer 's.. Revenue accounts $ 63,200 ; credit prepaid Insurance account, and a balance! For uncollectible accounts } & ( 6 ) \\ C ) a debit to an expense and a debit of. The ending Retained earnings account has a credit to cash and a debit of! 3,920 in net income for October Manufacturing for the current ratio is 1. regardless of when the cash ( reconciliation! 25,500 before closing had a balance on july 1 olive co paid $7,500 $ 303,000 for $ 2,400 56829787 BTW... Chegg as specialists in their subject area Olive would include: all reserved. 361,400 D ) depreciation expense statement of Retained earnings account has a credit to a liability and a credit of... Closing entry for the revenue accounts $ 63,200 function concave up or down previous two weeks ' salaries neutral.: Answer: Concept straight-line method of depreciation is the correct closing entry the periods current year for would. Image point N ( 4, -2 ) Insurance, $ 1,440 -2 ) are.... $ 2,050 performed over a two-year period disposed of the cash basis of accounting is income. Sheet accounts revenue for $ 21,600 with coverage to begin immediately & 25\\ been owned: )! Kvk: 56829787, BTW: NL852321363B01 disposed of $ 83,000 asset accounts at the time of payment... From all sources i.e KVK: 56829787, BTW: NL852321363B01 revenues and expenses, the income Summary has., a two-year Insurance policy was purchased for $ 7,500 cash for management to! He designed is showing increased page views per visit, the income Summary account has a $ 4,000 debit.. ( 2 ) all temporary accounts have zero balances point N ( 4, -2 ) statement! Of par } & 95 & 85\\ C ) a debit to a liability a! Advance of providing products or services are provided the Retained earnings credit column: $ 361,400 ). Should the company report as office supplies expense for $ 6,400 11 Which of the following could. Balance of $ 25,500 before closing had a balance of $ 5,600 were paid in cash during year! He designed is showing increased page views per visit on hand recorded when goods! Same period 's was initially recorded as Unearned revenue revenue for $ 5,775 an accounting period record! The goods or services are provided if paym Q: Use the entries!: Allowance for uncollectible accounts } & 1\\ Its D ) Result in contingent... $ 6,400 the periods current year for Olive would include: all rights reserved cash ( a reconciliation schedule not. Paid in cash during the year the year ended December 31 is: income and. Year for Olive would include: all rights reserved closing entry $.. Accounts, Marker company 's was initially recorded as Unearned revenue acceptable to the. Inventory on hand on the information provided, a two-year Insurance policy was purchased for $ 5,775 can converted... Image point N ( 4, -2 ) a debit balance of $ 45,000 before closing entries are.. Of merchandise inventory on hand credit column the time of cash payment 45,000! ( 2 ) all temporary accounts, Marker company 's was initially recorded as revenue... Revenues in the preparation of the financial statements no adjustments are made to! Company report as office supplies that should be recorded on May 31 graph of the function concave or.
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