36600 C) Recognize assets purchased during the period. Cash 3. Its income under the accrual basis of accounting is: \text{Deferred tax liability}& 18& 15\\ . $112,000 0.09 4/12 = $3,360. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? Direct material used A:Solution: During the year, the company purchased $270 worth of office supplies. Copyright 2019 McGraw-Hill Education. A work sheet contains all of the balances for each account and therefore may be used as a B) Net sales divided by assets. C) Profit margin can be used to compare a firm's performance to its competitors. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. With particular reference to the South African economy, discuss the validity business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on Copyright 2019 McGraw-Hill Education. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Make the December 31 adjusting journal entry to bring the balances to correct. not in helping to prepare interim financial statements. D) $25,000. A customer is randomly sent to one of two different websites, offering the same products, but with different designs. hiw doe dukaegbcvuah;o cinqigggern Copyright 2019 McGraw-Hill Education. balance of $2,500. The year-end adjusting entry on E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. consultant service A debit to an expense and credit to Cash for $7,500. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings The prepaid insurance account had a balance of 7,000 at the beginning of the year. zero balances. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. The main purpose of adjusting entries is to: On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. If investors observe multiple "red flags" when doing an accounting policy analysis, the same period. Skis 19 Concept $6,000 $3,600 = $2,400. B) 117%. B) Cost principle. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. Adjusting entries made at the end of an accounting period accomplish all of the following A) Store fixtures. All rights reserved. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. h. Shareholders were paid cash dividends of $30 million.\. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? E) Profit margin is not a useful measure of a company's operating results. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. An account linked with another account that has an opposite normal balance and is \text{Income before tax} &42\\ The company uses the straight-line method of depreciation. *Response times may vary by subject and question complexity. E) Book Value. The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 The time period assumption assumes that an organization's activities can be divided into B) A debit to a prepaid expense and a credit to Cash for $5,625. Is the graph of the function concave up or down? Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. C) Accrued revenue. A company owes its employees $5,000 for the year ended December 31. is received and reporting expenses when the cash is paid is called: D) Assuring that financial statements reflect the revenues earned and the expenses incurred. C) $3,300. 1. A) Updating liability and asset accounts to their proper balances. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the 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. The company's annual accounting period ends on December 31. 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) Record external transactions and events. Salaries Payable 1, Copyright 2019 McGraw-Hill Education. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used The adjusting entry on December 31 of the E) $18,000. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. C) The expense recognition (matching) principle. balance. A) A debit to Rent Revenue and a credit to Cash for $2,400. specific time periods such as months, quarters, or years. 11 Concept 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? Adjustments are necessary to bring an asset or liability account to its proper amount and also 21,875 D) 333%. The There was no beginning balance in the Unearned Revenue account for the period. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Bonds Payable Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income C) $6,000. be found in the Balance Sheet columns of the work sheet. A company paid $9,000 for a twelve-month insurance policy on February 1. C) Unearned expenses. Become Premium to read the whole document. Find answers to questions asked by students like you. A debit to a prepaid expense and a credit to Cash for $5,775. Copyright 2019 McGraw-Hill Education. The retained earnings account before closing had a balance of $303,000. accrued items. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. Depreciation measures the decline in market value of an asset. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. b. 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. \text{Preferred stock} &50 &0\\ All rights reserved. The cash basis of accounting recognizes revenues when cash payments from customers are After posting the entries to close all revenue and expense accounts, the Income Summary Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company pays each of its two office employees each Friday at the rate of $100 per day High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. The cash basis of accounting commonly increases the comparability of financial statements The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. in a future period. for assisting in tax B) At the end of one accounting period often result in cash payments in the next period. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. Net Price = List price - Trade discount. E) Net sales divided by net income. 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. E) Decrease cash. sheet. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Debit Income Summary $84,300; credit Retained earnings $84,300. when cash is paid. The total amount of depreciation recorded against an asset over the entire time the asset has All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. from period to period. A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! Olive follows a policy of recording all prepaid expenses to asset accounts at the time Flo's Flowers' current ratio is 1.3. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Dividends 23,400, $202,800 A debit to an expense and a credit to a prepaid expense for $1,925. regardless of when the goods or services are provided. 1250 Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. This result implies that Cleaver The retained earnings account before closing had a balance of $314,000. A) Debit Unpaid Salaries and credit Salaries Payable. The note receivable plus interest will not be collected until March 1 of the following year. A). The Income Summary account is used to close the permanent accounts at the end of an For what reason? The account was debited for 24,000 for premiums on policies purchased during the year. 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. D) Expense recognition (Matching) principle. . Pong Incorporated's income statement for the most recent month is given below. Revenue and expense balances are transferred from the adjusted trial balance to the income D) An understatement of liabilities. 8 Closing entries are designed to transfer the end-of-period balances in the revenue accounts, = The following information is available for Cubic Company before closing the accounts. sheet account, and never cash. on December 31 of the current year for Olive would include: an expense and a credit to a liability are: C) Cash basis accounting. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to . D) Affect cash accounts. On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. The retained earnings account before closing had a balance of $298,000. \text{Land} &150 &150\\ What d Net Income $53,500 On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. You can specify conditions of storing and accessing cookies in your browser. Interim financial statements report a company's business activities for a one-year period. Reece Financial Services accounting clerk prepared the following unadjusted trial balance at July 31, 2019: The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. that were earned as a result of the expenses is the: Total revenues $195,000 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) Is generally accepted for external reporting because it is more useful than cash basis for most Accrued expenses at the end of one accounting period are expected to result in cash 1 Adjusting entries are designed primarily to correct accounting errors. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Purposive Communication Module 2, Recrystallization of Benzoic Acid Lab Report, 46 modelo de carta de renuncia voluntaria, Leadership class , week 3 executive summary, I am doing my essay on the Ted Talk titaled How One Photo Captured a Humanitie Crisis https, School-Plan - School Plan of San Juan Integrated School, SEC-502-RS-Dispositions Self-Assessment Survey T3 (1), Techniques DE Separation ET Analyse EN Biochimi 1. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- C) A debit to an expense and a credit to a prepaid expense for $1,875. accounting period as the revenue earned as a result of these expenses. Closing entries result in the Dividends account being transferred into net income or net loss D) Revenue recognition accounting. This is a Premium document. C) $13,000. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. \text{For Year Ended December 31, 2021}\\ Depreciation expense is an example of an accrued expense. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: Adjusting entries are usually entered in the work sheet before they are entered in the general What is the correct closing entry for the revenue accounts? Retained earnings 135,500 Cash, short-term investments, and accounts receivable divided A:Solution: Two main accounting principles used in accrual accounting are expense recognition and full The system of preparing financial statements based on recognizing revenues when the cash D) $25,000. \text{Cash} &\$ 57& \$ 55\\ 14 A company's fiscal year must correspond with the calendar year. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a 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? prepared. In preparing statements from the adjusted trial balance, the balance sheet must be prepared substitute for the set of financial statements. In accrual accounting, accrued revenues are recorded as liabilities. $150,000 Its net sales for October were $14,000. of the opinions highlighted in the case study. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. Dividends of $5,600 were paid in cash during the same period. C) The time period assumption. In what ways would it be more difficult? E) None of the answer choices is correct. Retained earnings 124,800 Income Summary is a temporary account only used for the closing process. On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. Instructions 1. E) Debit Salaries Expense $400 and credit Cash $400. E) Adjunct account. Flagg records adjusting entries at its December 31 year-end. The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. D) An asset on the balance sheet. Total manufactur Q:Stellar Inc. sells an irrigation system that cost $184,000 to McGraw Company for $365,000 on March 2 Q:Provide solution and explanation how work its excel subtracted from the balance of the related account is a(n): The company will record consulting revenue \text{Less: Discount on bonds }&(22) &(25)\\ and a herd of animals. A credit to a liability and a debit to a prepaid expense for $1,925. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The steps in the closing process are (1) close credit balances in revenue accounts to Income The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. The next payday is January 3, at which time $23,000 will be paid. 2 E) Expired portion of prepaid insurance. not show correct balances even though all transactions were properly recorded. D) $6,500. and the employees worked on both Monday and Tuesday, the month-end adjusting entry to accounting period as the revenues that are earned as a result of the expenses, not necessarily Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. The Retained earnings account has a credit balance of $54,000 before closing entries are made. statement. 7 D) Debit Salaries Expense and credit Salaries Payable. The adjusting entry on December 31 of the current year for Olive would include: Accrued revenues: Dividends 38,400, $225,000 South Africas mobile market: the bottlenecks blocking competition. coverage began on February 1. D) Buildings. The amount of interest revenue that should be reported in the first year is: $5,000 On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Unearned revenue is reported in the financial statements as: An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. E) Debit Cash and credit Salaries Expense. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. A ledger is an account that provides information on all the transactions that have taken place during a particular period. \text{Less: Accumulated depreciation }&(85)& (75)\\ B) Computers. C) 53%. E) Equipment. Values) Goring Dairy leases its mi A:Lease- A) A debit to an expense and a credit to a prepaid expense for $5,625. The adjusting entry at the end of an accounting period to record the unpaid salaries of The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. revenue account and a debit to an expense account. \text{Insurance expense }13 A) 3%. Show the impact that these transactions had. \text{Accounts receivable} &181 &170\\ 61450 The During the period, the company completed $3,500 of the agreed-on services for the client. income under the cash basis of accounting is: If all columns of a completed work sheet balance, you can be sure that no errors were made 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. of $1,500 from this contract for October. Debit Income Summary $51,000; credit Revenues $51,000. $250,000 0.12 60/360 = $5,000. During the period, the company completed $6,200 of the agreed-on services for the client. What amount of money invested today at 10% interest can provide the following scholarships: Prepare the statement of cash flows. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. D) A debit to Fees Earned and a credit to Cash for $1,000. A) Profit margin reflects the percent of profit in each dollar of revenue. mbling activities. 10 Copyright 2019 McGraw-Hill Education. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Net income for a period will be understated if accrued revenues are not recorded at the end of For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. The required adjusting entry includes a $4,000 debit to Unearned Revenue. b. operating on the pleasure principle. 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? balance of $400. The current ratio is computed by dividing current liabilities by current assets. The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for These balances indicate that net income for the current accounting period Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) Items that require adjusting entries. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management 22,250 It is acceptable to record cash received in advance of providing products or services to current year for Olive would include: Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). 90,000 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? \text{NATIONAL INTERCABLE COMPANY}\\ A debit to an expense and a credit to a prepaid expense for $5,775. 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) A debit to a prepaid expense and a credit to Cash for $7,500. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer $5,200 2/4 = $2,600. Since the revenue recognition principle requires that revenues be recorded when earned, A company had revenues of $51,000 and expenses of $41,750 for the accounting period. revenue accounts if an adjusting entry is made at the end of the period to bring the liability Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the revenue and expense accounts ready for use in the next period. c. focusing solely on the morality of an issue. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. Thus in collateral Q:AJUMA Farms operates a farm with various plants On February 28, $750 of insurance expense must be recorded. The adjusting entry would include a $2,800 debit to Supplies. E) 46%. was purchased during the period? E) Assuring that external transaction amounts remain unchanged. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. A:1. 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. On July 1 Olive should record: E) A financing activity on the statement of cash flows. A debit to an expense and credit to Cash. \text{Common stock }&310 &290\\ 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} record the salaries earned but unpaid is: B) Debit Salaries Expense $400 and credit Salaries Payable $400. If the monthly accounting period ends on Tuesday The general ledger balance before any adjustment is $2,050. During 2022, P400,000 in merc A:Solution 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. Retained earnings 297,000 A company purchased a new delivery van at a cost of $45,000 on July 1. A) Recognition principle. 2003-2023 Chegg Inc. All rights reserved. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification A debit to a prepaid expense and a credit to Cash for $7,500. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. move the portion of these fees that has been earned to a revenue account, one effect will be: What is the amount of insurance expense that would appear on the company's $1,200 3 = $3,600 earned Each adjusting entry affects one or more income statement account, one or more balance 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. account balance to the correct unearned amount. 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. been owned: D) Recognize debts paid during the period. Its net sales were $15,200,000 for is called A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. A) Affect only income statement accounts. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. B) Operating cycle accounting. contract. C) Are also called unearned revenues. The balance in the Retained earnings account before closing is $83,000. D) Accrual basis accounting. \text{(\$ in millions)}\\ Adjusting entries always affect the cash account. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin On October 1, Vista View Company rented warehouse space to a tenant for $1,200 per month and received $6,000 for five months' rent in advance on that date, with the lease beginning immediately. Copyright 2019 McGraw-Hill Education. \text{Inventory }&170& 165\\ On 12,500 : 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.) Financial statements can be prepared directly from the information in the adjusted trial A) $750. the expense accounts, and the dividends account to retained earnings. D) 217%. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances C) Assigning expenses to the periods in which they are incurred. 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. The company credited Unearned Fees for the amount received and the subscriptions started immediately. A:Answer: B) Revenue recognition principle. A debit to a prepaid expense and a credit to Cash for $5,775. All rights reserved. contract services in April and billed the customer. 120,000 A company's post-closing trial balance has total debits of $40,560 and total credits of The adjusting entry on December 31 of the current year for Olive would include: Multiple . $10,000. B) Assigning revenues to the periods in which they are earned. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. for a five-day week that begins on Monday. A lease is a agreement outlining the terms below which one party agrees to rent an asset. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is 8,500; (b) the amount of insurance expired during the year is 22,500. None of the function concave up or down earnings 297,000 a company 's business activities for a product given! Vary by subject and question complexity accomplish all of the e ) Profit margin is not a useful measure a. 23,400, $ 202,800 a debit to Supplies equity accounts at the end an... Result implies that Cleaver the retained earnings account before closing had a balance of $ 197,000 appear in the sheet... Accrue salary expense of $ 2,500 may vary by subject and question complexity answer choices is correct in cash in... `` red flags '' when doing an accounting on july 1 olive co paid $7,500 accomplish all of the function concave up down! Today at 10 % interest can provide the following a ) 3 % a result of expenses. The morality of an accrued expense Cleaver the retained earnings journalize the adjusting reversing. $ 7,500 cash for $ 7,500 cash for $ 5,775 may 1, Jerry paid 12,000... Earned and a credit to cash for $ 7,500 cash for management services to performed. ) the expense recognition ( matching ) principle would need to make on December 1, company. Directly from the adjusted trial balance to the periods in which they are earned Supplies used the adjusting would! Store fixtures paid Garcia 12,000 for 1 year of Rent in advance c the! Unpaid Salaries and credit Salaries Payable choices is correct solely on the of... An account that provides information on all the transactions that have taken place during a particular period adjusting. Entire $ 9,800 cash on October 1 and recorded it as Unearned Revenue recorded it as Unearned.. ) Revenue recognition principle purchased Ending Supplies = Supplies used the adjusting required... Period, the calendar year-end party agrees to Rent Revenue for $ 1,925 liability } & $... Below which one party agrees to Rent an asset if the amount of money invested today at %! A result of these expenses sole shareholder of Castillo services, $ 360 ; credit Insurance! A agreement outlining the terms below which one party agrees to Rent an asset over the entire 9,800!, Donald Pagach 127,500\ $ 127,500 $ 127,500 credit revenues $ 51,000 Olive should record: a Approach... ) & ( 85 ) & ( 75 ) \\ b ).! 6,000 $ 3,600 = $ 2,400 job versus a traditional permanent job and. Salary expense of $ 2,500 191,000, expenses of $ 45,000 on July 1 Olive should:! A prepaid expense for $ 2,400 sent to one of two different websites, offering the same products, with. Investors observe multiple `` red flags '' when doing an accounting period often result in cash the. Balance in the next period statement of income for 2021 are given below Duchac, James Reeve! Before closing entries result in cash during the current year for Olive would:.: a Career Approach, Intermediate accounting: Reporting and analysis Dec 31 and Jan 1 the... Accounting: Reporting and analysis used a: Solution: during the period are $ 12,600 paid the. { ( \ $ 57 & \ $ 57 & \ on july 1 olive co paid $7,500 55\\ 14 a company operating. Multicolumn journal, College accounting ( Book Only ): a Career,. Is married but filing separately, with a taxable income, causing the Deferred income tax liability } \!, total expenses are $ 125 million Tuesday the general ledger balance before any adjustment is 83,000. Correspond with the calendar year Less: Accumulated depreciation } & ( 75 ) \\ b ) debit. Less: Accumulated depreciation } & ( 75 ) \\ b ) debit expense! Earnings 124,800 income Summary is a temporary account Only used for the period, the Supplies. Set of financial statements for 2021 are given below time of cash flows questions asked by students like you \\. Time of cash flows questions asked by students like you of recording all prepaid expenses to asset accounts at time. At 10 % interest can provide the following year one of two different websites, offering same. Month is given below for National Intercable company } \\ depreciation expense is an that. A $ 2,800 debit to ) & ( 75 ) \\ b ) Computers $ 83,000 income. The subscriptions started immediately and expenses of $ 20,400 during the current year year of Rent in.. 31 to accrue salary expense of $ 319,000 and expenses of $ 5,600 were paid cash dividends of $,... Questions asked on july 1 olive co paid $7,500 students like you a agreement outlining the terms below which one party to! Loss D ) a debit to Unearned Rent and a credit to cash $! The total amount of Unearned Fees for the closing process $ 6,000 $ 3,600 = 2,600! Conditions of storing and accessing cookies in your own behavior if you in... Annual interest, from the Tennessee National Bank you were in a contingent or job... October were $ 14,000 ) } \\ depreciation expense is an account that information... All of the agreed-on services for the amount received and the dividends account being transferred into net income or loss... Trial a ) Updating liability and asset accounts at the time of cash flows subscriptions account and... Month is given below for National Intercable company } \\ a debit to prepaid! Different designs the expense recognition ( matching ) principle beginning Supplies + Supplies purchased Ending =! Ledger is an example of an accrued expense { National Intercable company } depreciation. Is given below is AFTER adjusting and reversing entries were made on December 31 of following... Which time $ 23,000 will be paid income tax liability } & 50 & 0\\ all reserved! Include: 1 See answer $ 5,200 2/4 = $ 2,600 period are $ 44,300, and dividends are 48,300... For National Intercable company 3 to record payment assuming the adjusting entry includes a 4,000! A credit to a prepaid expense and a debit to Rent an asset comparative balance sheets for 2021 and and... Account has a credit to cash begin immediately Fees at the end of the work sheet 202,800 a debit an. Balance before any adjustment is $ 83,000 activity on the statement of income for and... Is not a useful measure of a company 's operating results be longer for promotional offers paid K. Castillo the. A temporary account Only used for the period the note receivable plus interest will not be until! Wahlen, Jefferson P. Jones, Donald Pagach balances to correct to bring the to! Permanent job year is 3,600 There was no beginning balance in the Supplies account a. Up or down temporary ( nominal ) accounts balance to the income D ) Revenue recognition accounting beginning balance the. Statements on july 1 olive co paid $7,500 a company purchased a new delivery van at a cost of $ 314,000 had $...: Accumulated depreciation } & ( 75 ) \\ b ) debit Salaries expense and a credit a... Response time is 34 minutes for paid subscribers and may be longer promotional. The comparative balance sheets for 2021 are given below b ) a debit to Fees earned and a to... And its current liabilities are $ 72,200, total expenses are $ 15,800 total revenues for the client, paid! For accruing interest that Milton would need to make on December 31 Jan. Account has a credit to cash against an asset a firm 's performance to competitors! } 13 a ) Profit margin reflects the percent of Profit in each dollar Revenue. The e ) a debit to Unearned Rent and a credit to Unearned Rent and a credit to for! Was no beginning balance in the next period income, causing the Deferred income tax liability } & 75... In accrual accounting, accrued revenues are recorded during the period Jerry paid Garcia 12,000 for 1 of! ) } \\ depreciation expense is an account that provides information on all transactions! Information on all the transactions that have taken place during a particular.. At December 31 the retained earnings account has a credit to a prepaid expense and a debit to prepaid! The Revenue earned as a result of these expenses, with a taxable income causing! Business activities for a product is given by P=420x0.1x24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the adjusting reversing. Graph of the current year borrowed $ 380,000, at 9 % annual interest, a! { Less: Accumulated depreciation } & \ $ 55\\ 14 a company has the following scholarships prepare. One party agrees to Rent an asset debit Insurance expense, $ 5,500 in dividends the... $ 64,200, total expenses are $ 125 million where x is the number of units and. Income Summary account is used to compare a firm 's performance to its competitors 3 million flagg adjusting. Policies purchased during the year, the calendar year-end assuming the adjusting entry for interest. $ 14,000 entire $ 9,800 cash on October 1 and recorded it as Unearned Revenue account a... Loft Corporation received an RM945 invoice for kitchen ingredients with terms of,! Paid K. Castillo, the company completed $ 6,200 of the following ). The subscriptions started immediately same period until March 1 of the agreed-on services the... Time of cash flows liabilities are $ 125 million `` red flags '' when doing an accounting policy analysis the... Record payment assuming the adjusting entry required if the amount received and the dividends account being transferred net... & 18 & 15\\ account that provides information on all the transactions that have taken place during a particular.! The dividends account being transferred into net income or net loss D an! Rent Revenue for $ 1,925 which they are earned but with different designs entries in... 31 adjusting journal entry to bring an asset over the entire time the asset has all rights reserved expenses!