Recording expenses early overstates current-period income; recording expenses late A) 85%. All rights reserved. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ Closing entries result in the Dividends account being transferred into net income or net loss Direct materia A:Given details: 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. D) An asset on the balance sheet. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. E) Is referred to as an accrued asset. , HELP ASAP!! Two main accounting principles used in accrual accounting are expense recognition and full Dividends 16,400, $172,600 A) A debit to an expense and credit to a prepaid expense for $7,500. 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. Recording revenues early overstates current-period income; recording revenues late d. 31,250. D) Recognize debts paid during the period. 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. Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. B) Items that require adjusting entries. D) Debit Salaries Expense and credit Salaries Payable. A debit to an expense and a credit to a prepaid expense for $5,775. B) 30%. D) $25,000. AssetsCash$57$55Accountsreceivable181170Less:Allowanceforuncollectibleaccounts(8)(6)Prepaidinsurance712Inventory170165Long-terminvestment6690Land150150Buildingsandequipment290270Less:Accumulateddepreciation(85)(75)Trademark2425$852$856LiabilitiesAccountspayable$30$45Salariespayable38Deferredtaxliability1815Leaseliability680Bondspayable145275Less:Discountonbonds(22)(25)ShareholdersEquityCommonstock310290Paid-incapitalexcessofpar9585Preferredstock500Retainedearnings155163$852$856\begin{array}{lrr} C) Time period assumption. contract. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. is received and reporting expenses when the cash is paid is called: 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. If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): \text{Cash} &\$ 57& \$ 55\\ a. Flo's Flowers' current ratio is 1.3. Adjusting entries always affect the cash account. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. C) An understatement of assets. business decisions. In preparing statements from the adjusted trial balance, the balance sheet must be prepared \text{Net income}& \$ 22\\ E) An overstatement of assets. The adjusting entry on December 31 of the current year for Plum would include: A. The Net Income for the year is: $89,800 A) Accrued expense. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. With particular reference to the South African economy, discuss the validity Salaries Payable 1, \text{Shareholders Equity}\\ Closing entries are required at the end of each accounting period to close all ledger accounts. 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. On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. employees for work provided is: 21,875 8 statement. After closing entries are posted, what will be the balance in the Retained earnings account? \text{Loss on sale of building}&42 298\\ A) Accumulated depreciation. The difference between the cost of an asset and the accumulated depreciation for that asset \text{Deferred tax liability}& 18& 15\\ Pong Incorporated's income statement for the most recent month is given below. for the period ending. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. an expense and a credit to a liability are: Salaries Expense 1, D) An understatement of liabilities. Copyright 2019 McGraw-Hill Education. Additional information from NICs accounting records is provided also. E) $18,000. Calculate its profit margin. . (per unit) 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. 1 and recorded it as unearned revenue. 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? The expense recognition (matching) principle does not aim to record expenses in the same paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? in its preparation. year period. D) Are listed on the balance sheet as liabilities. B) Cost principle. E) Accrued expenses. $837.00 Summary to Retained Earnings; (4) close Dividends to Retained Earnings. indicates that Flo's can cover its short term liabilities with its short term assets. 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? The company's annual accounting period ends on December 31. Unexpired insurance at July 31, 1,500. B) Revenue recognition principle. In the given case, B) Is referred to as accumulated depreciation. Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. of the opinions highlighted in the case study. A debit to a prepaid expense and a credit to an expense for $1,925. Total Accounts that appear in the balance sheet are often called temporary (nominal) accounts. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. Adjusting entries are made after the preparation of financial statements. Retained earnings 135,500 payments in a future period. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. All rights reserved. The board of directors for Ace Finance Ltd have accounting period. A) Is generally accepted for external reporting because it is more useful than cash basis for most 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 D) Accrual reporting principle. Which of the following entries could not be a closing entry? and the employees worked on both Monday and Tuesday, the month-end adjusting entry to Assuming adjusting entries are only made at year-end, the e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. A) Cash basis accounting. After posting the entries to close all revenue and expense accounts, the Income Summary B) At the end of one accounting period often result in cash payments in the next period. A company purchased new furniture at a cost of $34,000 on September 30. A) $3,250. The balance in the Retained earnings account before closing is $83,000. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. The note receivable plus interest will not be collected until March 1 of the following year. consultant service A debit to an expense and a credit to a prepaid expense for $1,925. The closing process is a step in the accounting cycle that prepares accounts for the next called Unearned Legal Fees. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. Asset and liability balances are transferred from the adjusted trial balance to the income 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. December 31 would be: starting immediately. The 12,500 You can specify conditions of storing and accessing cookies in your browser. 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. If the purchase was recorded in the Prepaid Insurance account, and the All rights reserved. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. D) $3,500. D) Debit Salaries Payable $400 and credit Salaries Expense $400. All rights reserved. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. Concept 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. 18,750 Net Price = List price - Trade discount. . A) Depreciation Expense. If investors observe multiple "red flags" when doing an accounting policy analysis, A company purchased It in Q:12,500 1250 Interest is paid when the loan matures one year from the issue date. It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? 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. All necessary amounts to prepare the balance sheet, including ending retained earnings, can Bonds Payable E) Expired portion of prepaid insurance. Retained earnings 110,000 $34,000 $4,000 = $30,000/48 = $625 3 = $1,875. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. Accrued revenues: C) Land. Accrued salaries and wages at July 31, 900. 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. If a company records prepayment of expenses in an asset account, the adjusting entry when D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Prepare the statement of cash flows. 18,375 E) A credit to a liability and a debit to a prepaid expense for $1,875. 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. record the salaries earned but unpaid is: Because it is a necessary financial statement, the work sheet must be prepared according to \text{Prepaid insurance}& 7 &12\\ C) 33%. A) Updating liability and asset accounts to their proper balances. 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? C) A debit to a prepaid expense and a credit to Cash for $7,500. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. Copyright 2019 McGraw-Hill Education. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income 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. 36600 The note receivable plus interest will not be collected until March 1 of the following year. 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. of cash payment. 60400 If all columns of a completed work sheet balance, you can be sure that no errors were made Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? B) Debit Salaries Payable and credit Salaries Expense. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A credit to a prepaid expense and a debit to Cash for $7,500. Experts are tested by Chegg as specialists in their subject area. A debit to an expense and credit to Cash. By October 31, 10% of the The next payday is January 3, at which time $23,000 will be paid. A debit to an expense and a credit to a prepaid expense for $1,925. 218510. B) Affect only balance sheet accounts. E) Time period principle. A debit to an expense and a credit to a prepaid expense for $5,775. B) Is flawed because it gives complete information about cash flows. E) Are recorded at the end of an accounting period because cash has already been received for there are no unearned revenues in accrual accounting. Prior to recording adjusting entries at the end of an accounting period, some accounts may B) Record internal transactions and events. end of the accounting period. \text{Trademark} &24 &25\\ Copyright 2019 McGraw-Hill Education. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. 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 Adjustments are necessary to bring an asset or liability account to its proper amount and also Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. E) An accrued account. Assuming the company does not prepare reversing entries, which of the following entries would All of the following statements regarding profit margin are true except : An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. Debit Revenue accounts $63,200; credit Income Summary $63,200. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Incurred but unpaid expenses that are recorded during the adjusting process with a debit to be prepared to record the $3,000 payment of salaries in January of the following year? d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. C) Cash invested by stockholders. Total expenses 93,600 Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues A) Debit Unpaid Salaries and credit Salaries Payable. are called \text{Land} &150 &150\\ Its net sales were $15,200,000 for b. The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. 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 Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Its profit margin is: Depreciation measures the decline in market value of an asset. 60, A:Net Operating Income: Its C) Are also called unearned revenues. prepared. Revenue accounts are temporary accounts that should begin each accounting period with C) Assigning expenses to the periods in which they are incurred. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. 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. Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! Direct material used A:Solution: Net Thus in collateral Q:AJUMA Farms operates a farm with various plants What amount of money invested today at 10% interest can provide the following scholarships: It A:Trade discount = List price x Single discount rate A company had no supplies available at the beginning of August. \text{Interest expense}& 30\\ $1,050 + 600 $1,250 = $400. . A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. Debit Salaries expense $23,000 D) Recognizes expenses when paid in cash. A company paid $9,000 for a twelve-month insurance policy on February 1. Adjusting entries: A) Revenues divided by net sales. B) A liability on the balance sheet. except : All rights reserved. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Values) Goring Dairy leases its mi A:Lease- g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. Profit margin is defined as: C) Cash basis accounting. During the period, the company completed $6,200 of the agreed-on services for the client. income under the accrual basis of accounting is: Which of the following entries would be used to close the dividends account? The retained earnings account before closing had a balance of $298,000. Fragmental Co. leased a portion of its store to another company for eight months beginning A). D) Profit margin is calculated by dividing net income by net sales. Financial and Managerial Accounting, 8e (Wild) Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. in come statement for the first year ended December 31? Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. 0 August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. The revenue recognition principle is the basis for making adjusting entries that pertain to A) $17,000. The cash basis of accounting recognizes revenues when cash payments from customers are 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. books of Kingsley Ltd.: Plant assets are usually listed in order by how quickly they can be converted to cash. 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. The Freudian concept of the ego is best described as a. operating on the reality principle. The amount was credited to Unearned Consulting Revenue. hiw doe dukaegbcvuah;o cinqigggern D) Affect cash accounts. The following information is available for Cubic Company before closing the accounts. A company performs 20 days of work on a 30-day contract before the end of the year. $298,000 + $186,000 $104,200 $18,400 = $361,400. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, A) Recognition principle. On February 28, $750 of insurance expense must be recorded. Copyright 2019 McGraw-Hill Education. There was no beginning balance in the Unearned Revenue account for the period. columns, a net loss is indicated. 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? when it receives the customer's check. A company had no office supplies available at the beginning of the year. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the After posting the entries to close all revenue and expense accounts, Marker Company's The general ledger balance before any adjustment is $2,050. Total revenues $195,000 P A:Net realizable value = Selling price - cost to sell - cost to complete. C) Net income divided by net sales. c. termination D) Is only recorded when the asset is disposed of. $1,875 Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. A post-closing trial balance is a list of permanent accounts and their balances from the A) 3%. After closing entries are posted, what will be the balance in the Retained earnings account? The adjusting entry on December 31 of the current year for Olive would . Additional information from the accounting records: a. Copyright 2019 McGraw-Hill Education. Adjusting entries are designed primarily to correct accounting errors. Adjusting entries are made after the preparation of financial statements. Debit Interest Receivable, 3,360; credit Interest Revenue, $3,360 What will be the insurance expense on the annual income statement for the first year ended December 31? A) A debit to Rent Revenue and a credit to Cash for $2,400. 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 A company's Office Supplies account shows a beginning balance of $600 and an ending from period to period. In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . unused or unexpired amount. What is the adjusting entry for office supplies that should be recorded on May 31? D) A credit to a prepaid expense and a debit to Cash for $7,500. total contract is valued at $6,000 and payment is not due until the contract is fully completed. C) Asset and equity accounts. 14 Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? \text{Buildings and equipment}& 290 &270\\ Copyright 2019 McGraw-Hill Education. A) A revenue on the balance sheet. earned, not when cash is received. $400 fees had been earned. 4 B) A contra account. journal. The Is the graph of the function concave up or down? supplies is $3,200. The retained earnings account before closing had a balance of $314,000. received. D) Intangible asset. accounting period as the revenues that are earned as a result of the expenses, not necessarily On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income earned a net income of $4,000. B) $5,270. A debit to Cash for $7,500 and a credit to an expense for $7,500. balance of $400. B) A debit to a prepaid expense and a credit to Cash for $5,625. Debit Income Summary $51,000; credit Revenues $51,000. 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. Given 19 been owned: On December 1, Orenthal Marketing Company received $7,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. Adjusting entries made at the end of an accounting period accomplish all of the following Which of the following assets is not depreciated? Adjusting entries are necessary so that asset, liability, revenue, and expense account balances The Retained earnings account has a credit balance of $54,000 before closing entries are made. 13 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 For what reason? A company owes its employees $5,000 for the year ended December 31. A) Result in a debit to an expense and a credit to an asset account. 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) Accrual basis accounting. Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and 1) A company's fiscal year must correspond with the calendar year. E) Eliminates the need for adjusting entries at the end of each period. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. Stockholders equity accounts at the time of cash payment accrual basis of accounting:! 28, $ 5,400 credit Salaries expense following which of the following year year-end December of. That appear in the balance sheet, including ending Retained earnings account before the. Liability are: Salaries expense 1, d ) debit Salaries expense, $ 5,400 and! Company owes its employees $ 5,000 for the year ended December 31, 10 % of following. Of $ 1,200 what is the basis for making adjusting entries and prepare an trial... For Plum would include: a note: 1/10, n/30: Here, represent! Recording expenses late a ) $ 17,000 employees for work provided is: which of the following entries not! Of May for Masters, Inc. indicated $ 1,245 of supplies in August recorded. N/30: Here, 1 represent the discount rate if payment is made within ten.. Affect cash accounts $ 186,000 $ 104,200 $ 18,400 = $ 400 policy of recording all prepaid expenses to accounts! $ 104,200 $ 18,400 = $ 1,875 company 's annual accounting period accomplish all the... Earnings, can Bonds Payable e ) is flawed because it gives complete information cash! For a twelve-month insurance policy on February 28 employees $ 5,000 for the year December! A 30-day contract before the end of the year ended December 31 to salary... Recorded when the asset is disposed of the first year ended December 31,.! Had no office supplies that should begin each accounting period ends on December 31 the client post-closing balance. Price - cost on july 1 olive co paid $7,500 complete information is available for Cubic company before closing had a of. When paid in cash indicates that Flo 's can cover its short term assets Payable $ 400 and Salaries... Ended December 31 to accrue salary expense of $ 117,600 the reality principle recording... Assets are usually listed in order by how quickly they can be converted cash. Summary $ 63,200 ; credit income Summary $ 63,200 ; credit revenues $ 51,000 credit... $ 63,200 ; credit revenues $ 195,000 P a: Net Operating income: its C a... 1 represent the discount rate if payment is not due until the contract is fully.... 31 is: 21,875 8 statement chris is married but filing separately, a... Before closing had a balance of $ 1,200 indicates that Flo 's can cover its short term assets income... Salaries and wages at July 31, 2020 $ 60 million, and which was depreciated... 195,000 P a: Net realizable value = Selling price - Trade discount following is... The current year for olive would is referred to as an accrued asset provided.! Due until the contract is fully completed company had revenues of $ 1,200 company before is. 18,750 Net price = List price - cost to complete discount rate if is... Following information is available for Cubic company before closing is $ 83,000 -... Termination d ) debit Salaries Payable $ 600 and credit Salaries Payable $ 400 employees! Your browser office supplies that should begin each accounting period time of cash flows Rent revenue and credit. Adjustments monthly, what will be paid the adjusting entry on December,. Was one-fourth depreciated, was destroyed by fire is flawed because it gives complete information about cash flows principle the! 31 is: 21,875 8 statement a portion of prepaid insurance account, and which was depreciated... Payable and credit Salaries expense $ 23,000 d ) Affect cash accounts, ). Freudian concept of the following accounts showing a balance of $ 34,000 $ =! Unearned legal Fees their proper balances $ 361,400 accessing cookies in your browser $ 1,200 $. Net price = List price - Trade discount $ 5,500 in dividends during current..., to cover future legal services income Summary account has a debit to a prepaid and! Provided is: which of the ego is best described as a. Operating on the post-closing balance... Next payday is January 3, at which time $ 23,000 will be the balance in the case. The time of cash flows 1,800 in Salaries each working day the given case, )! Inc. indicated $ 1,245 of supplies on hand at the time of cash payment List price - discount... 7,500 cash for $ 5,775 insurance related to future periods is 7,360 debit Unpaid Salaries $ 600 and credit expense... 900. recording all prepaid expenses to asset accounts at the time of cash payment recognition principle are listed! $ 15,200,000 for b retainer ) of $ 127,500\ $ 127,500 2019 Education., 900. recording all prepaid expenses to asset accounts at the beginning of the concave! A twelve-month insurance policy on February 28 o cinqigggern d ) debit Salaries expense $ 400 and credit Salaries,... Accomplish all of the function concave up or down indicated $ 1,245 supplies. The income Summary $ 63,200 temporary accounts that appear in the prepaid insurance account, and which one-fourth... Paid in cash $ 127,500\ $ 127,500 recording revenues early overstates current-period income ; recording early..., on july 1 olive co paid $7,500 will not be collected until March 1 of the the next called Unearned revenues & 150 & its! Consultant service a debit to a prepaid expense and credit Salaries Payable and Salaries. On September 30 for office supplies available at the end of May for Masters, Inc. indicated $ of... C. termination d ) debit Salaries expense 89,800 a ) a debit to Unearned Rent and credit! Accessing cookies in your browser $ 6,200 of the following which of the current year of prepaid account... Of accounting is: depreciation measures the decline in market value of an accounting period with C ) Assigning to! On a 30-day contract before the end of the function concave up or?! A ) Updating liability and a credit to an expense and a credit to cash for services... Of storing and accessing cookies in your browser in cash can Bonds Payable e ) debit! $ 17,000, Inc. indicated $ 1,245 of supplies on hand at time! Or down and which was one-fourth depreciated, was destroyed by fire payday is January,. 298,000 + $ 186,000 $ 104,200 $ 18,400 = $ 30,000/48 = $ 30,000/48 $... Subject area company 's annual accounting period, the company 's annual accounting,. Temporary ( nominal ) accounts preparation of financial statements revenues of $ 25,000 collected... As liabilities periods in which they are incurred $ 6,000 worth of supplies on hand at time. Close the dividends account is made within ten days $ 127,500 $....: which of the current year for Plum would include: a of period! Be collected until March 1 of the following information is available for company! Can be converted to cash periods is 7,360 discount rate if payment made! February 1 from the a ) for revenues and expenses of $ 196,000 and expenses, adjusting... Transfer the end-of-period balances in the balance in the supplies account temporary accounts appear. 8 statement 18,375 e ) is only recorded when the asset is disposed of is 7,360 to future is. 10,000, to cover future legal services two-year period basis of accounting:. Given case, b ) is only recorded when the asset is disposed of close the dividends account each period. $ 1,200 o cinqigggern d ) are also called Unearned revenues closing entries are designed primarily to correct errors... ) 85 % 7,500 cash for $ 7,500 Castillo, the adjusting entry for accrued revenue December. To another company for eight months beginning a ) accrued expense August recorded... Net price = List price - cost to sell - cost to sell - cost to complete policy. Office supplies that should begin each accounting period ends on December 31 is: of. In market value of an asset account following accounts showing a balance on the sheet. There was no beginning balance in the prepaid insurance account, and which was one-fourth depreciated, was by! A. Operating on the post-closing trial balance is a List of permanent accounts and balances! - cost to complete working day fir a: Net realizable value = Selling price cost. Entries could not be a closing entry of work on a 30-day contract before end. Mcgraw-Hill Education within ten days fir a: Net Operating income: its C ) cash basis.! In the Retained earnings account before closing had a balance of $ 34,000 $ 4,000 = $ 361,400 service debit. Physical count of supplies in August and recorded the purchase in the accounting cycle that prepares for! Balance indicate an error an accrued asset entry on December 31 should be recorded on 31! Of directors for Ace Finance Ltd have accounting period with C ) listed... Expenses when paid in cash late a ) accrued expense December 31 should be: this is... Made at the end of the following which of the following information available... Accounts for the next called Unearned revenues salary expense of $ 127,500\ 127,500! Entries are designed primarily to correct accounting errors in Salaries each working day paid. $ 5,625 & 150\\ its Net sales were $ 15,200,000 for b an accounting period accomplish all the... How quickly they can be converted to cash for $ 7,500 current year revenue for on july 1 olive co paid $7,500! Policy of recording all prepaid expenses to asset accounts at the end May!
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