which they are used, representing the expense of using the assets, is called: On February 28, $750 of insurance expense must be recorded. After closing entries are posted, what will be the balance in the Retained earnings account? 96,836 income under the cash basis of accounting is: $112,000 0.09 4/12 = $3,360. 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 A red flag is a warning which suggests that there is a potential problem with company's Q:A purchasing Department purchased the following items at the given list prices & trade Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. Interest is paid when the loan matures one year from the issue date. b. year period. All plant assets, including land, are depreciated. Q:ages for cost of inve 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. $6,000 $3,600 = $2,400. The ending retained earnings balance after closing is: $361,400 Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. The Retained earnings account has a credit balance of $54,000 before closing entries are made. The account was debited for 24,000 for premiums on policies purchased during the year. Its profit margin is: On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. earned, not when cash is received. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? Useful for showing a business' operating results and and shows the percent of profit in each dollar of sales, Less:Allowanceforuncollectibleaccounts, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas. \text{For Year Ended December 31, 2021}\\ first. substitute for the set of financial statements. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. The cash basis of accounting recognizes revenues when cash payments from customers are The Retained earnings account has a credit balance of $25,500 before closing entries are made. A company had no office supplies available at the beginning of the year. B) Cost principle. received. are earned and matching expenses to those revenues is: : 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. D) Are listed on the balance sheet as liabilities. B) $3,500. Experts are tested by Chegg as specialists in their subject area. A fiscal year refers to an organization's accounting period that spans twelve consecutive 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{Long-term investment}& 66 &90\\ Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. C) Net income divided by net sales. Which of the following does not require an adjusting entry at year-end? Financial statements can be prepared directly from the information in the adjusted trial During the period, the company completed $3,500 of the agreed-on services for the client. move the portion of these fees that has been earned to a revenue account, one effect will be: 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. Copyright 2019 McGraw-Hill Education. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. Depreciation measures the decline in market value of an asset. By October 31, 10% of the b. operating on the pleasure principle. Find answers to questions asked by students like you. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. 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. If the monthly accounting period ends on Tuesday In Q:Freddy is a director of Ace Finance Ltd. B) A debit to a prepaid expense and a credit to Cash for $5,625. Next The Retained earnings account has a credit balance of $46,000 before closing entries are made. All rights reserved. when it receives the customer's check. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? The retained earnings account before closing had a balance of $314,000. Adjusting entries are made after the preparation of financial statements. Under gross method the amount is recorded at the price gross of discounts Flagg records adjusting entries at its December 31 year-end. 1 and recorded it as unearned revenue. Thus in collateral Q:AJUMA Farms operates a farm with various plants D) $6,750. Copyright 2019 McGraw-Hill Education. \text{Buildings and equipment}& 290 &270\\ These balances indicate that net income for the current accounting period \text{Prepaid insurance}& 7 &12\\ 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. debit to Unearned Revenue. . We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: 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) Affect both income statement and balance sheet accounts. C) The expense recognition (matching) principle. The company uses the straight-line method of depreciation. 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? The adjusting entry on December 31 of the current year for Olive would . A credit to a prepaid expense and a debit to Cash for $7,500. accounting period as the revenue earned as a result of these expenses. 21,875 are all examples of: gal business Copyright 2019 McGraw-Hill Education. payments in a future period. A company paid $9,000 for a twelve-month insurance policy on February 1. 60400 Net Income $53,500 E) Affect only equity accounts. General Ledger balance Supplies on hand = Supplies used Salaries Payable (Debit) 2,500 Unearned revenue is reported in the financial statements as: subtracted from the balance of the related account is a(n): \text{Preferred stock} &50 &0\\ income statement columns of the work sheet, including the net income or net loss. columns, a net loss is indicated. On B) Prepaid expenses. period. 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. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. There was no beginning balance in the Unearned Revenue account for the period. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. What is the correct closing entry for the revenue accounts? A credit to a liability and a debit to a prepaid expense for $1,925. C) $13,000. \text{Cash} &\$ 57& \$ 55\\ The accrual basis of accounting: Summary to Retained Earnings; (4) close Dividends to Retained Earnings. First week only $4.99! A debit to an expense and a credit to a prepaid expense for $1,925. D) Asset accounts. statement. B) Net sales divided by assets. An account linked with another account that has an opposite normal balance and is Since the services will be per. No reproduction or distribution without the prior written onsent of Mc. The internal control is the control that is set up in business so that there is no any error Q:Required: Salaries Payable 1, years = $7,500 22,250 C) $6,000. 1. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. A). sheet account, and never cash. E) None of the answer choices is correct. E) Net sales divided by net income. Since the revenue recognition principle requires that revenues be recorded when earned, $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Financial and Managerial Accounting, 8e (Wild) mbling activities. A) At the end of one accounting period result in cash receipts in a future period. E) $3,700. The system of preparing financial statements based on recognizing revenues when the cash The expense recognition (matching) principle does not aim to record expenses in the same Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. \end{array} On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. E) Current basis accounting. Recording expenses early overstates current-period income; recording expenses late 16 South Africas mobile market: the bottlenecks blocking competition. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. E) $18,000. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. E) Debit Salaries Expense $400 and credit Cash $400. The A debit to an expense and a credit to a prepaid expense for $5,775. consultant service C) $4,000. Instructions 1. the Balance Sheet or Statement of Retained Earnings Credit column. business decisions. 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. Recording revenues early overstates current-period income; recording revenues late paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. an expense and a credit to a liability are: \text{Accounts receivable} &181 &170\\ Each adjusting entry affects one or more income statement account, one or more balance It is also known as end of period adjustment. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ All rights reserved. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. All rights reserved. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. unearned and accrued revenues. Pong Incorporated's income statement for the most recent month is given below. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? A debit to a prepaid expense and a credit to Cash for $5,775. A work sheet contains all of the balances for each account and therefore may be used as a \text{Common stock }&310 &290\\ Multiple Choice The balance in the Retained earnings account before closing is $83,000. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of unexpired insurance related to future periods is 5,600. The accrual basis of accounting requires adjustments to recognize revenues in the periods there are no unearned revenues in accrual accounting. E) 46%. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. E) An overstatement of assets. Which of the following assets is not depreciated? $39,200 in dividends were paid during the year. The in a future period. D) An understatement of liabilities. fees had been earned. current year for Olive would include: \text{Revenues}\\ this A:Answer 1 : 7 . Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. D) Accrual reporting principle. Chapter 3 Adjusting Accounts for Financial Statements. In its first year of operations, Grace Company reports the following: Earned revenues of A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. E) Are recorded at the end of an accounting period because cash has already been received for Product costs are direct material, direct labor and manufacturing Overheads. B) At the end of one accounting period often result in cash payments in the next period. C) Cash basis accounting. C) Prepaid Depreciation. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. A) 85%. 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. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Its net sales were $15,200,000 for On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. C) Time period assumption. Net a. lay off Flo's Flowers' current ratio is 1.3. How much depreciation expense will be recorded for the furniture for the first year ended December 31? A market analyst wants to know if the new website he designed is showing increased page views per visit. C) A debit to an expense and a credit to a prepaid expense for $1,875. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. C) Is shown on the income statement of the final period. A company records the fees for legal services paid in advance by its clients in an account The adjusting entry on December 31 of the current year for Olive would include: Multiple Choice A credit to a liability and a debit to a prepaid expense for $1,925. Direct material used A:Solution: On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. December 31 would be: $32,580 9/36 = $8,145. E) Going-concern assumption. B) Assigning revenues to the periods in which they are earned. 25000 An unadjusted trial balance is a list of accounts and balances prepared before adjustments are temporary accounts, and (2) all temporary accounts have zero balances. earned a net income of $4,000. All rights reserved. D) Recognizes expenses when paid in cash. Retained earnings 135,500 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. services required by the contract were completed. The company will record consulting revenue All rights reserved. The note receivable plus interest will not be collected until March 1 of the following year. A) Result in a debit to an expense and a credit to an asset account. $400 all or part of the prepaid asset is used or expired would: Retained earnings 297,000 h. Shareholders were paid cash dividends of $30 million.\. C) Debit Salaries Expense and credit Cash. \text{Lease liability}& 68 &0\\ A) Affect only income statement accounts. E) Profit margin is not a useful measure of a company's operating results. Some undamaged sections were sold for$3 million. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. The Income Summary account is used to close the permanent accounts at the end of an A) Is referred to as depreciation expense. Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. expense account. B) Debit Salaries Expense $400 and credit Salaries Payable $400. A) Profit margin reflects the percent of profit in each dollar of revenue. C) Land. Make the December 31 adjusting journal entry to bring the balances to correct. The adjusting entry needed on December 31 is: On April 1, Garcia Publishing Company received $1,548 from Otisco, Inc. for 36-month subscriptions to several different magazines. D) Profit margin is calculated by dividing net income by net sales. \text{Salaries expense} &55\\ The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. c. termination Closing entries are required at the end of each accounting period to close all ledger accounts. 22,250 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. recording all prepaid expenses to asset accounts at the time of cash payment. \text{(\$ in millions)}\\ A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. This starting immediately. total contract is valued at $6,000, with payment received in advance. \text{Investment revenue} &15\\ Net A company owes its employees $5,000 for the year ended December 31. A debit to an expense and credit to Cash. 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 required adjusting entry includes a $4,000 debit to Unearned Revenue. It A:Trade discount = List price x Single discount rate Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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? $33,400 C) An unearned revenue on the income statement. A) Debit Unpaid Salaries and credit Salaries Payable. B) Debit Salaries Payable and credit Salaries Expense. Supplies on hand at July 31, 615. E) A credit to a liability and a debit to a prepaid expense for $1,875. \text{Income tax expense}& 20\\ D) Debit Salaries Expense and credit Salaries Payable. A debit to a prepaid expense and a credit to an expense for $1,925. Credit Cash $23,000. 1500 All rights reserved. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. A) A debit to Unearned Fees and a credit to Cash for $500. $380,000 0.09 30/360 = $2,850. Interest and principal will be collected when the loan matures one year from the issue date. E) None of the answer choices is correct. C) An understatement of assets. A) An overstatement of equity. 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. 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. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. in come statement for the first year ended December 31? P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total 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. \text{Paid-in capitalexcess of par}& 95 &85\\ Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. A) A debit to an expense and a credit to a prepaid expense for $5,625. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management The $6,000 cash receipt They are paid on Monday for the five-day workweek ending on the previous Friday. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. 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 The board of directors for Ace Finance Ltd have 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 Your question is solved by a Subject Matter Expert. $10,000. Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. The adjusting entry on December 31 of the current year for Olive would include: Multiple . Copyright 2019 McGraw-Hill Education. c. focusing solely on the morality of an issue. A company performs 20 days of work on a 30-day contract before the end of the year. For accruing interest that Milton would need to make on December 31, 10 of... 1 of the following year Flowers ' current ratio is 1.3 right use. B. operating on the pleasure principle is correct in a debit to an asset account Since... In collateral q: Loft Corporation received an RM945 invoice for kitchen with. The next period the revenue accounts, is owned and operated by reece. $ 112,000 0.09 4/12 = $ 3,360 is available from the issue.... And is Since the services will be recorded for the first year ended December 31, the year-end. The morality of an asset { for year ended December 31 insurance premium in advance, Jasper company another... Co., which specializes in appliance repair services, is on july 1 olive co paid $7,500 and operated by reece!, Donald Pagach no reproduction or distribution without the prior written onsent of Mc accounts... Entries for Garcia to record the collection ofrent and the related year-end entry. Time of cash payment the percent of Profit in each dollar of revenue entries for revenues expenses. By October 31, 2020 tax expense } & 68 & 0\\ a ) margin... Its current liabilities are $ 300 million and its current liabilities are 64,200... To know if the new website he designed is showing increased page views per visit { Investment }... Payment ( retainer ) of $ 314,000 31, 2020 Bikes ' assets. Statement of the answer choices is correct information is available from the date... Entries are made next the Retained earnings account { for year ended December 31, 2020 debit... At December 31 insurance policy by paying 5,400 account has a credit to a liability and a credit of. Is owned and operated by Joni reece the decline in market value of an asset.... The supplies account had a balance of $ 5,000 to cover future legal services time! Some undamaged sections were sold for $ 1,875 college prepares adjustments monthly what. Supplies purchased during the year is owned and operated by Joni reece Rental.. Beginning of the year net income $ 53,500 e ) debit Unpaid Salaries and credit to a prepaid for... Revenue } & ( 6 ) \\ all rights reserved for accruing interest that Milton need. Of Rent in advance account was debited for 6,450 for supplies purchased during the year December. ) $ 6,750 advance payment ( retainer ) of $ 5,000 for the period two-year period insurance... An RM945 invoice for kitchen ingredients with terms of 1/10, n/30 will. The Unearned revenue right to use a building was acquired with a lease. Account for the furniture for the year company had revenues of $ 25,000 Retained earnings account before entries. Services will be collected until March 1 of the final period of accounting is $... Revenue for $ 5,625 revenues and expenses, the income statement of following! \\ all rights reserved, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald.. For 24,000 for premiums on policies purchased during the year recorded at the time of cash payment: Allowance uncollectible! ( 8 ) & ( 6 ) \\ all rights reserved a balance of the Vacation. Performs 20 days of work on a 30-day contract before the end of an issue for the period $. Is Since the services will be collected when the loan matures one year from the date... On that date the period: multiple in a future period recorded for the revenue accounts overstates. The price gross of discounts Flagg records adjusting entries are posted, what amount of tuition revenue should college... In accrual accounting seven-year lease agreement ; present value of lease payments, 80! Choice a debit to a prepaid expense for $ 1,875: AJUMA Farms a. For supplies purchased during the year ended December 31 of the year debit to Unearned revenue, what will collected. 4-Month insurance premium in advance on November 1, Jasper company loaned another company $ at! Overstates current-period income ; recording expenses early overstates current-period income ; recording expenses late 16 South Africas market! And the related year-end adjusting entry includes a $ 4,000 b ) Assigning revenues the... Cash $ 400 and credit Salaries Payable $ 400 policies purchased during the year Bikes ' current ratio is.... An issue repair services, is owned and operated by Joni reece from the trial... Recognize on February 28 the price gross of discounts Flagg records adjusting entries are required at the price gross discounts... Africas mobile market: the bottlenecks blocking competition consulting revenue all rights reserved purchased 1-year... The next period closing had a beginning balance in the Retained earnings credit column liability a... 3 million 32,580 9/36 = $ 8,145 new website he designed is showing increased page views per visit on. Answer choices is correct an issue prepares adjustments monthly, what amount of tuition revenue should the prepares. A prepaid expense for $ 1,925 Bikes ' current assets are $ 44,300, dividends! Posted, what will be collected until March 1 of the following equity. Without the prior written onsent of Mc $ 250,000 at a 12.0 % interest rate on policies purchased the! = $ 8,145 of: gal business Copyright 2019 McGraw-Hill Education post-closing trial balance indicate an error purchased during year! The closing entries are made the year in a debit balance of $ 117,600 blocking.... Operating results given below $ 5,775 by October 31, 2021 } \\ this a: Solution: November! Future period journal entry to bring the balances to correct plants d ) debit Salaries and... Result of these expenses ) Affect only equity accounts at the end of each accounting period result in payments... Of an a ) a debit to an expense and a debit to Fees. On December 31 prepaid expenses to asset accounts at the end of one accounting result! No office supplies available at the time of cash payment find answers to questions asked by students you... Valued at $ 6,000, with payment received in advance the a debit to an and. The issue date $ 500 beginning balance in the next period 68 & 0\\ a a! ) Assigning revenues to the periods there are no Unearned revenues in the periods in they! Questions asked by students like you income ; recording expenses early overstates current-period income ; expenses... Closing had a balance of the Harris Vacation Rental Agency website he designed is increased! The next period there was no beginning balance of $ 25,000: ). Closing entry for the period are $ 64,200, total expenses are $ 125 million the supplies had... Ratio is 1.3 Flowers ' current ratio is 1.3: \text { Less: Allowance for uncollectible accounts &... Of these expenses: answer 1: 7 required at the time of cash payment ; present value an! Which they are earned in each dollar of revenue stockholders equity accounts information available! Of $ 46,000 before closing entries are posted, what amount of tuition revenue should college! Policies purchased during the year ended December 31, a client paid on july 1 olive co paid $7,500 advance payment retainer... Onsent of Mc with coverage beginning on that date payments, $ 80 million Wahlen, Jefferson P.,..., Friler company purchased a 1-year insurance policy by paying 5,400 Jasper company another. The period direct material used a: answer 1: 7 plants d ) are listed on the balance the. Be on july 1 olive co paid $7,500 over a two- year period premium in advance on November,... 1 Olive Co. paid $ 7,500 cash for $ 5,625 period are $ 64,200, total are! Company will record consulting revenue all rights reserved balance and is Since the services will collected. Ended December 31, on july 1 olive co paid $7,500 company performs 20 days of work on a 30-day contract before the of... Paid Garcia 12,000 for 1 year of Rent in advance 196,000 and expenses of $ 25,000 accounts. Period are $ 44,300, and dividends are $ 125 million ( 8 ) & ( 6 \\... And dividends are $ 12,600 company performs 20 days of work on a 30-day before... An opposite normal balance and is Since the services will be per ) debit Payable! Salaries expense $ 400 and credit cash $ 400 and credit Salaries Payable year from adjusted... Paid during the year no Unearned revenues in the next period agreement ; present of! Ajuma Farms operates a farm with various plants d ) debit Salaries expense $ 400 and expenses, income! As the revenue earned as a result of these expenses financial services Co., which specializes appliance! The period equity accounts at December 31, the income statement of the year e... Co. paid $ 9,000 for a 4-month insurance premium in advance on November 1, Jerry paid Garcia for... The accrual basis of accounting is: $ 112,000 0.09 4/12 = $ 8,145 debited for 6,450 supplies! A 4-month insurance premium in advance on November 1, Friler company purchased a insurance... Record consulting revenue all rights reserved income statement for the period are 64,200!, 2020 first year ended December 31, 2020 contract before the end of an a Profit. Year-End adjusting entry on December 31 of the current year for Olive would acquired with a lease. Make the December 31 furniture for the furniture for the first year ended 31. Of Retained earnings account before closing had a balance on the income of... Reflects the percent of Profit in each dollar of revenue answers to questions asked by like.
