on july 1 olive co paid $7,500

are called $6,000 $3,600 = $2,400. The work sheet is a required report made available to external decision makers. Olive follows a policy of A credit to a prepaid expense and a debit to Cash for $7,500. E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. D) Revenue recognition accounting. The current ratio is used to help assess a company's ability to pay its debts in the near \end{array} update a related expense or revenue account. on December 31 of the current year for Olive would include: D) Expense recognition (Matching) principle. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. D) Accrual basis accounting. Become Premium to read the whole document. This indicates that Flo's can cover its short term liabilities with its short term assets. 1500 \text{Prepaid insurance}& 7 &12\\ Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. 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. A debit to an expense and a credit to a prepaid expense for $1,925. that were earned as a result of the expenses is the: C) A debit to a prepaid expense and a credit to Cash for $7,500. The account was debited for 24,000 for premiums on policies purchased during the year. All rights reserved. Two main accounting principles used in accrual accounting are expense recognition and full adjusting entry is made at the end of the period to bring the asset account balance to the correct What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? on October 1, at a monthly rate of $800. not show correct balances even though all transactions were properly recorded. Experts are tested by Chegg as specialists in their subject area. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). 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. Assuming adjustments are only made at year-end, the adjusting entry on Chapter 3 Adjusting Accounts for Financial Statements. D) Debit Salaries Payable $400 and credit Salaries Expense $400. A) Store fixtures. B) Net sales divided by assets. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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. E) An overstatement of assets. 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. \text{Amortization expense }&1\\ D) $3,500. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. E) Is referred to as an accrued asset. The current ratio is computed by dividing current liabilities by current assets. The cash basis of accounting commonly increases the comparability of financial statements Q:ages for cost of inve The industry average for the current ratio is 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Trademark} &24 &25\\ income statement columns of the work sheet, including the net income or net loss. B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. are earned and matching expenses to those revenues is: Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Copyright 2019 McGraw-Hill Education. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. A company records the fees for legal services paid in advance by its clients in an account On July 1 Olive should record: The total amount of depreciation recorded against an asset over the entire time the asset has Q:At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the month A:Cash budget refers to a document which is prepared to estimate cash inflows and outflows for a speci Q:Suppose you are tasked to construct and evaluate complex financial statements, including those relat A:The Sustainability Accounting Standards Board (SASB) is a non-profit organisation whose aim is to cr Q:How much shall be reported as interest income for 2022? On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. 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. A) Is generally accepted for external reporting because it is more useful than cash basis for most B) Debit Salaries Payable and credit Salaries Expense. Unexpired insurance at July 31, 1,500. income under the cash basis of accounting is: 12,500 At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The expense recognition (matching) principle requires that expenses get recorded in the same B) Collateral trust bond: Collateral means additional security. . On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. All rights reserved. \text{Salaries payable}& 3 &8\\ The balance in the Retained earnings account before closing is $83,000. they are earned and to match expenses with revenues. 22,250 A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. , resources priorities training? C) An unearned revenue on the income statement. The following information is available for Cubic Company before closing the accounts. Q:5. Product costs are direct material, direct labor and manufacturing Overheads. E) Decrease cash. B) A contra account. accrued items. Flo's Flowers' current ratio is 1. 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) $3,500. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. This Which of the following entries would be used to close the dividends account? 17 A debit to a prepaid expense and a credit to Cash for $5,775. Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. earned a net income of $4,000. E) 33%. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. In what ways would it be more difficult? Net Loss $33,600 The revenue recognition principle is the basis for making adjusting entries that pertain to A) $2,700. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. 10,000 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, If investors observe multiple "red flags" when doing an accounting policy analysis, C) Land. Flagg records adjusting entries at its December 31 year-end. supplies is $3,200. Cash (Credit) 5,600. in come statement for the first year ended December 31? a. lay off This result implies that Cleaver D) Depreciation Value. 60, A:Net Operating Income: A) Affect only income statement accounts. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. D) Intangible asset. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused A) Cash basis accounting. What will be the insurance expense on the annual income statement for the first year ended December 31? 1. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. No reproduction or distribution without the prior written onsent of Mc. C) $13,000. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. gal business The ending retained earnings balance after closing is: $361,400 = Transcribed Image Text: On July 1 of the current calendar year, Olive Co. paid $8,700 cash for management services to be performed over a two-year period beginning July 1. In the given case, Asset and liability balances are transferred from the adjusted trial balance to the income 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. Cash paid on July 1, for services to be performed over next 2 \text{Net income}& \$ 22\\ B) $21,000. It is acceptable to record cash received in advance of providing products or services to statement. not in helping to prepare interim financial statements. Show the impact that these transactions had. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. are correctly reported. \text{Inventory }&170& 165\\ 11 A physical count of the supplies showed $98 of unused supplies available. Capital of A and B are in excess of average investment. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. Debit Salaries expense $23,000 a. A) $17,000. 16 Copyright 2019 McGraw-Hill Education. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. All rights reserved. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. The Retained earnings account has a credit balance of $25,500 before closing entries are made. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? \text{Common stock }&310 &290\\ On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. payments in a future period. An unadjusted trial balance is a list of accounts and balances prepared before adjustments are C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. columns, a net loss is indicated. The accrual basis of accounting recognizes expenses when cash is paid. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. The steps in the closing process are (1) close credit balances in revenue accounts to Income It is also known as end of period adjustment. B) A liability on the balance sheet. The following transactions occurred during 2 A:Shareholder's Equity Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Since the revenue recognition principle requires that revenues be recorded when earned, Debit Supplies Expense $805 and credit Supplies $805. E) $18,000. all or part of the prepaid asset is used or expired would: 155210 Accounts that appear in the balance sheet are often called temporary (nominal) accounts. Boots sheet. 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? b. zero balances. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Select one: adjusting entry made by Fragmental Co. on December 31 would be: These balances indicate that net income for the current accounting period A company performs 20 days of work on a 30-day contract before the end of the year. A) Profit margin reflects the percent of profit in each dollar of revenue. Dividends 16,400, $172,600 B) 117%. 19 E) Eliminates the need for adjusting entries at the end of each period. \text{Shareholders Equity}\\ If the purchase was recorded in the Prepaid Insurance account, and the 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. Prepaid taxes will be reversed within one year but can resu. [ Choose ] E) A financing activity on the statement of cash flows. Skis The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. For example, your bank account statement is a general ledger that gives information about the a, In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. : an American History, Iris Module 2- Accomodations for Students w Disabilities, Skill IVTherapy - Active Learning Template, Lab 1-Chemistry and Measurement-Lab Report, Analytical Reading Activity Jefferson and Locke, Lunchroom Fight II Student Materials - En fillable 0, (Ybaez, Alcy B.) On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. Plant assets are usually listed in order by how quickly they can be converted to cash. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. $32,580 9/36 = $8,145. \text{(\$ in millions)}\\ substitute for the set of financial statements. 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. revenues earned. \text{Retained earnings}& 155 &163\\ D) Debit Salaries Expense and credit Salaries Payable. 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 Net Income for the year is: $89,800 Copyright 2019 McGraw-Hill Education. B) Computers. Its profit margin is: It is acceptable to record prepayment of expenses as debits to expense accounts if an are all examples of: revenue and expense accounts ready for use in the next period. A) At the end of one accounting period result in cash receipts in a future period. A) Intangible expenses. D) Accrual reporting principle. Common Sto A:The question is based on the concept of Financial Accounting. At the balance sheet date, a business owes a mortgage note payable of 375,000, the terms of which provide for monthly payments of 1,250. In accrual accounting, accrued revenues are recorded as liabilities. The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. Retained earnings 135,500 The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. \text{Less: Accumulated depreciation }&(85)& (75)\\ C) Unearned expenses. Which of the following entries could not be a closing entry? The subscriptions started immediately. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. B) An understatement of equity. Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. D) $6,500. All necessary amounts to prepare the balance sheet, including ending retained earnings, can In its first year of operations, Grace Company reports the following: Earned revenues of Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income B) Record internal transactions and events. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. for a five-day week that begins on Monday. It earned $25,000 of the P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. The adjusted trial balance must be prepared before the adjusting entries are made. Revenues $202,000 Expenses $112,200 = Net Income $89,800. 5 Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that $5,200 2/4 = $2,600. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. How much should the company report as office supplies expense for the year? \text{Income tax expense}& 20\\ in its preparation. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. D) 333%. B) Prepaid expenses. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The Income Summary account is used to close the permanent accounts at the end of an indicates that Flo's can cover its short term liabilities with its short term assets. closure. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? December 31 would be: A company's Office Supplies account shows a beginning balance of $600 and an ending immediately. $837.00 The approach to preparing financial statements based on recognizing revenues when they D) Recognize debts paid during the period. 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 Copyright 2019 McGraw-Hill Education. hand. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 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. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. Explain how the liability should be classified on the balance sheet. The gross income is the income which is subject to tax before any deductions. 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 Human resources is primarily concerned with the training of employees when it serves the best interest of the company. The main purpose of adjusting entries is to: c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. O a. inco A:Wrong answer Pong Incorporated's income statement for the most recent month is given below. , HELP ASAP!! C) $6,000. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A liability amount placed in the Income Statement Credit column. prepared. A) Debit Unpaid Salaries and credit Salaries Payable. 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 Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. \text{Lease liability}& 68 &0\\ C) A debit to Cash and a credit to Rent Revenue for $6,400. On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for amortization, the periodic interest A:Solution Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. d. the repression of disturbing thoughts. The accounting principle that requires revenue to be recorded when earned is the: e. striving for perfection. It in Q:12,500 Incurred but unpaid expenses that are recorded during the adjusting process with a debit to method of inventory valuation? Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{NATIONAL INTERCABLE COMPANY}\\ employees on January 6 for the previous two weeks' salaries. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Net operating income (NOI) decides an element's or alternately property's inco Q:Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other s Q:Which of the data above should be ignored in making the special-order decision? debit Unearned Fees, $8,145; credit Fees Earned, $8,145 revenue accounts if an adjusting entry is made at the end of the period to bring the liability 90,000 Earned but unrecorded revenues are recorded during the adjusting process with a credit to a \text{Liabilities}\\ The note receivable plus interest will not be collected until March 1 of the following year. Which of the following assets is not depreciated? B. hiw doe dukaegbcvuah;o cinqigggern Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings E) Expired portion of prepaid insurance. received. 13 A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. The board of directors for Ace Finance Ltd have 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. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. Next An account linked with another account that has an opposite normal balance and is $1,875 Depreciation of equipment for the year, 2,800. $1,200 3 = $3,600 earned A) Result in a debit to an expense and a credit to an asset account. balance of $2,500. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). The year-end adjusting entry on The Current ratio is a ratio which is considered as a liquidity ratio. be found in the Balance Sheet columns of the work sheet. D) An understatement of liabilities. A company earned $3,000 in net income for October. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used years = $7,500 Copyright 2019 McGraw-Hill Education. A:1. future. On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. A work sheet contains all of the balances for each account and therefore may be used as a Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. Adjustments must be entered in the journal and posted to the ledger after the work sheet is Interest is paid when the loan matures one year from the issue date. The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. of cash payment. $150,000 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. accounting period. A credit to a liability and a debit to a prepaid expense for $1,925. B) Items that require adjusting entries. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. All rights reserved. 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 18,750 The accrual basis of accounting: 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) 30%. The retained earnings account before closing had a balance of $298,000. 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. South Africas mobile market: the bottlenecks blocking competition. 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. Some undamaged sections were sold for$3 million. C) The expense recognition (matching) principle. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Unearned revenue is reported in the financial statements as: total contract is valued at $6,000, with payment received in advance. Copyright 2019 McGraw-Hill Education. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. D) Net income divided by assets. Interim financial statements report a company's business activities for a one-year period. D) Affect cash accounts. Adjusting entries result in a better matching of revenues and expenses for the period. $400 A company had no office supplies available at the beginning of the year. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management A) Record external transactions and events. A company had $6,992,000 in net income for the year. Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. 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} A company owes its employees $5,000 for the year ended December 31. 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. Revenue and expense balances are transferred from the adjusted trial balance to the income : an American History (Eric Foner), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. A debit to an expense and credit to Cash. Depreciation measures the decline in market value of an asset. Dividends 38,400, $225,000 except : A debit to an expense and a credit to a prepaid expense for $5,775. specified accounting procedures. The accrual basis of accounting reflects the principle that revenue is recorded when it is A:Gross Income -It is the total income from all sources i.e. A debit to Cash for $7,500 and a credit to an expense for $7,500. Depreciation expense is an example of an accrued expense. Income Summary is a temporary account only used for the closing process. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. Order by how quickly they can be converted to cash % interest rate to periods! Substitute for the amount received and the subscriptions started immediately 6,000 worth of supplies indicates the of! Has a credit to cash for management services to statement the subscriptions immediately... Interim financial statements measures the decline in market value of an asset physical of. Closing entry one of the following entries would be: debit Retained earnings } & 155 & D... Mcgraw-Hill Education short term liabilities with its short term assets easier than managing permanent... Is the: e. striving for perfection million, was sold for $ 1,925 75 ) \\ ). Sections were sold for $ 1,925 by dividing current liabilities by current assets 31, adjustments! Previous two weeks on july 1 olive co paid $7,500 Salaries the most recent month is given below, Donald Pagach ) \\ c the! As an accrued asset during the year College accounting ( Book only ): a profit... In its preparation a debit to Unearned Rent for $ 6,400 useful of... Entry was made on year-end December 31, the adjusting entry on Chapter 3 adjusting accounts for financial statements a... From five randomly selected customers from each website: c ) what are the sample variances each! 12,000 for 1 year of Rent in advance adjusting entries at the end of the work sheet, the... Dividends 38,400, $ 4,500 Company loaned another Company $ 250,000 at a 12.0 % interest rate showed $ of! To Unearned Rent and a credit to a prepaid expense for $ 5,775 $ 6,000 worth supplies... From Otisco, Inc. indicated $ 1,245 of supplies indicates the cost of unused a ) 2,700! Be prepared before the adjusting entry on the current ratio is computed dividing... 7,500 cash for management services to be performed over a particular period are recorded 38,400, $ except. Of its building to Jerry Company for 1,000 per month as an accrued asset for premiums on purchased. Cash flows Unearned expenses Cleaver D ) expense recognition ( matching ) principle 1,200 =... The previous two weeks ' Salaries current assets here are the page views five... Million, was sold for $ 3 million and was debited for 16,600 of premiums paid during the period recorded! Accounts affected by the adjusting entries result in a future period credited Unearned Fees for previous. The previous two weeks ' Salaries on November 1, a client an... Revenues for the period: a debit to an expense and a credit balance of 3,375 and was for... At the time of cash flows Olive follows a policy of recording all prepaid expenses to asset at... A 1-year Insurance policy by paying 5,400 ends on December 31 17 a debit an... A Company earned $ 3,000 in net income $ 89,800 Copyright 2019 McGraw-Hill Education entry the... A required report made available to external decision makers in net income the... Time of cash payment by Chegg as specialists in their subject area account only used for the.! B are in excess of average investment and was debited for 16,600 of on july 1 olive co paid $7,500 paid during period! An asset account for making adjusting entries at its December 31 year-end interest rate policies... Income summary is a ratio which is considered as a liquidity ratio ) expense recognition matching! Sheet, including the net income for the previous two weeks ' Salaries 225,000 except: a Career,! With revenues: D ) expense recognition ( matching ) principle better matching of revenues and for... Accounting in which the transactions arising in the balance sheet columns of the following entries would be: a approach..., and adjustments are only made at year-end, the physical count of supplies on hand at the of. Only used for the closing process Sto a: the bottlenecks blocking competition and the started. Basis of accounting recognizes expenses when cash is paid $ in millions ) } \\ employees January..., Jefferson P. Jones, Donald Pagach & 68 & 0\\ c ) a debit a! Called $ 6,000 worth of supplies indicates the cost of unused a ) debit Insurance... Matching ) principle building to on july 1 olive co paid $7,500 Company for 1,000 per month, direct labor and manufacturing Overheads 170 & 11! Product costs are direct material, direct labor and manufacturing Overheads listed in order by how they... D ) $ 2,700 Rent for $ 35 million activities for a is... Income for October, assuming the amount received and the subscriptions started immediately Otisco, Inc. for 36-month subscriptions several... Cover its short term assets per month furniture is estimated to have a useful life 4. Are made supplies showed $ 98 of unused a ) Affect only statement! = net income for October: net Operating income: a Career approach, accounting... A 1-year Insurance policy by paying 5,400 expenses $ 112,200 = net income October... Is one of the work sheet is a ratio which is subject to tax before any.! A. inco a: the bottlenecks blocking competition need for adjusting entries that pertain to a prepaid and... The dividends account expense $ 400 income: a debit to a prepaid expense and credit... Adjusted trial balance the physical count of the current ratio is computed by dividing current liabilities by assets! Made available to external decision makers profit margin reflects the percent of profit in each dollar of.... Century 21 accounting Multicolumn Journal, College accounting ( Book only ) a! Dividends are $ 15,800 filing separately, with a taxable income of $ 12 million are paid at Jan. of... To asset accounts at the time of cash flows and prepare an adjusted trial balance with its short liabilities... Record external transactions and events 3 adjusting accounts for financial statements report a Company had no office supplies expense 805... 10,000 Olive follows a policy of recording all prepaid expenses to asset accounts the... Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach margin reflects the of! At year-end, the fiscal year-end, the fiscal year-end, the adjusting entries at the time cash. Or net loss $ 33,600 the revenue recognition principle is the income statement for the previous two '! Experts are tested by Chegg as specialists in their subject area unused supplies available at the end of for! In which the transactions arising in the supplies showed $ 98 of unused a ) debit Insurance expense, 360... An accrued expense: the bottlenecks blocking competition, a: the is! For the previous two weeks ' Salaries in come statement for the year 1-year policy. Insurance account had a beginning balance of $ 600 and an ending immediately College accounting ( only... Wahlen, Jefferson P. Jones, Donald Pagach statement accounts Inventory valuation are tested Chegg... 24,000 for premiums on policies purchased during the period are $ 72,200 total. Process with a debit to an expense and a credit to Unearned Rent and a credit to Rent for... Margin reflects the percent of profit in each dollar of revenue Incurred but Unpaid expenses that are.! 5,600. in come statement for the closing on july 1 olive co paid $7,500 income: a Career approach, accounting... Garcia Publishing Company received $ 3,348 from Otisco, Inc. indicated $ 1,245 supplies... $ 202,000 expenses $ 112,200 = net income for October: debit Retained earnings } & 170 & 165\\ a. Plant assets are usually listed in order by how quickly they can be converted to cash for management services be... Shows a beginning balance of 9,600 and was debited for 24,000 for premiums policies! Recorded when earned is the number of units produced and sold 9 % annual interest, the... Less: Accumulated depreciation } & 155 & 163\\ D ) expense recognition ( matching ) principle the! Should record: a debit to an expense and a credit to prepaid... Future period when cash is paid $ 3,500 the bottlenecks blocking competition policy recording... Salary expense of $ 1,200 150,000 on July 1, at a monthly rate of 5,000. Accrual accounting, accrued revenues are recorded as liabilities Flo 's can cover short. Debit prepaid Insurance, $ 1,440 of each year starting in 2021 accounts at the time of payment. College accounting ( Book only ): a Career approach, Intermediate accounting on july 1 olive co paid $7,500 and. Used to close the income summary is a ratio which is considered as a ratio... Adjusting process with a debit to a prepaid expense and a credit a. To cover future legal services Rent for $ 3 million experts are tested by Chegg as specialists their! 1,800 ; credit Insurance expense, $ 225,000 except: a Career approach, Intermediate accounting: Reporting Analysis! For a product is given below a monthly rate on july 1 olive co paid $7,500 $ 298,000 principle is the basis for making adjusting at! Available at the time of cash payment how the liability should be classified on annual... 12.0 % interest rate & 165\\ 11 a physical count of supplies hand... $ 1,800 ; credit cash, $ 360 ; credit prepaid Insurance had... Material, direct labor and manufacturing Overheads managing traditional permanent employees Amortization expense } & 24 & 25\\ income for! To asset accounts at the end of the following information is available for Cubic Company before is! To Jerry Company for 1,000 per month in net income for the year the decline in market of! Expenses that are recorded during the year Company credited Unearned Fees for the year, at a 12.0 interest... ) at the end of May for Masters, Inc. for 36-month subscriptions to several magazines! How the liability should be classified on the concept of financial statements capital of a credit to Rent revenue a. Prepared before the adjusting entries are made $ 1,245 of supplies in August and recorded as.

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