D) $25,000. E) A debit to Fees Earned and a credit to Cash for $500. 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} 18,375 Payment/Fee of tax By October 31, 10% of the 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. There was no beginning balance in the Unearned Revenue account for the period. Cash 3. How much depreciation expense will be recorded for the furniture for the first year ended December 31? 49,500 High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. 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. The main purpose of adjusting entries is to: is called $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? for assisting in tax revenue and expense accounts ready for use in the next period. statement. B) A debit to Fees Earned and a credit to Unearned Fees for $500. Copyright 2019 McGraw-Hill Education. A company purchased a new delivery van at a cost of $45,000 on July 1. \text{Liabilities}\\ Assuming adjusting entries are only made at year-end, the An account linked with another account that has an opposite normal balance and is On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): \text{Common stock }&310 &290\\ \text{Net income}& \$ 22\\ relevant range of production =10000 to 20000 units What d c. termination E) An accrued account. A) Record external transactions and events. 4 The subscriptions started immediately. 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. A) Updating liability and asset accounts to their proper balances. in come statement for the first year ended December 31? This result implies that Cleaver [ Choose ] method of inventory valuation? 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} The Current ratio is a ratio which is considered as a liquidity ratio. Copyright 2019 McGraw-Hill Education. 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. is 1. journal. update a related expense or revenue account. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. of the opinions highlighted in the case study. The expense recognition (matching) principle requires that expenses get recorded in the same employees on January 6 for the previous two weeks' salaries. The adjusting entry on December 31 of the current year for Olive would include: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. D) Recognizes expenses when paid in cash. 18,375 Because it is a necessary financial statement, the work sheet must be prepared according to E) A debit to Cash for $7,500 and a credit to an expense for $7,500. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to \end{array} a. Graph this function for x between 0 and 4200 . How much should the company report as office supplies expense for the year? D) Debit Salaries Payable $400 and credit Salaries Expense $400. A debit to an expense and credit to Cash. The cash receipt was recorded as unearned fees. B) $5,270. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. The company paid $50,800 in dividends during the year. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. A company entered into a 2-month contract for $50,000 on April 1. consultant service . starting immediately. Explain how the liability should be classified on the balance sheet. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. $298,000 + $186,000 $104,200 $18,400 = $361,400. $33,400 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. Depreciation measures the decline in market value of an asset. E) 33%. All rights reserved. The amount was credited to Unearned Consulting Revenue. mbling activities. \text{For Year Ended December 31, 2021}\\ C) Net income divided by net sales. All rights reserved. \text{Accounts payable}&\$ 30& \$ 45\\ Adjusting entries: Copyright 2019 McGraw-Hill Education. B) Is flawed because it gives complete information about cash flows. On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. The adjusting entry on December 31 of the current year for Olive would include: All rights reserved. $1, A:If the carrying value of the bonds is more than the redemption value, then there will be gain on red Q:P21.11 (LO 2, 3) Groupwork (Lessee-Lessor Accounting for Residual 120,000 E) Debit Salaries Expense $400 and credit Cash $400. Bonds Payable Thus in collateral Q:AJUMA Farms operates a farm with various plants On July 1 of the current calendar year, Olive Co. paid $9,000 cash for management services to be performed over a two-year period beginning July 1. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. first. What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? Which of the following accounts showing a balance on the post-closing trial balance indicate an error? On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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) Affect only income statement accounts. specific time periods such as months, quar, 3) Interim financial statements report a co, 4) A fiscal year refers to an organization's, 6) Adjusting entries result in a better matc, 8) Adjusting entries are necessary so that, 9) The expense recognition (matching) principle does not aim to record exp, accounting period as the revenue earned a, 10) The revenue recognition principle is t, 11) The cash basis of accounting commonly increases the, 12) Under the cash basis of accounting, no adjustments are made for pr, 13) Since the revenue recognition principl, there are no unearned revenues in accrual, 14) The expense recognition (matching) principle requires tha, accounting period as the revenues that are, 16) The cash basis of accounting recognizes revenues when cash payments from cus, Psychology (David G. Myers; C. Nathan DeWall), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Give Me Liberty! are correctly reported. 18 of 30 \text{Income Statement}\\ A company earned $3,920 in net income for October. December 31 would be: 1250 Show the impact that these transactions had. Its profit margin is: Prepare journal entries to record the purchase and the related year-end adjusting entry. NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. The adjusting entry No reproduction or distribution without the prior written onsent of Mc. B) $21,000. zero balances. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Revenue accounts are temporary accounts that should begin each accounting period with temporary accounts, and (2) all temporary accounts have zero balances. co A:Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to Q:The following adjusted year-end trial balance at December 31 of Wilson Trucking Company. ledger after all closing entries are journalized and posted. A) Items that require contra accounts. 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. $1,050 + 600 $1,250 = $400. \text{Assets}\\ Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. Unearned revenue is reported in the financial statements as: A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. E) Net sales divided by net income. A credit to a liability and a debit to a prepaid expense for $1,925. All rights reserved. $6,000 $3,600 = $2,400. A:Gross Income -It is the total income from all sources i.e. Management services fee per month = $7,500/24 = $312.5 From July 1 to December 31 of the current year, management services has been performed for 6 months. A debit to a prepaid expense and a credit to Cash for $5,775. After all closing entries are made, what will be the balance in the Retained earnings account? C) Recognize assets purchased during the period. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. Based on the information provided, A. A company purchased current ratio is 0. The accrual basis of accounting: The accrual basis of accounting requires adjustments to recognize revenues in the periods D) Is only recorded when the asset is disposed of. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. 14 22,250 of $1,500 from this contract for October. The Accrued revenues: books of Kingsley Ltd.: Recording expenses early overstates current-period income; recording expenses late Rent unearned at July 31, 300. columns, a net loss is indicated. income under the accrual basis of accounting is: After closing entries are posted, what will be the balance in the Retained earnings account? In Q:Freddy is a director of Ace Finance Ltd. 20 At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. 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. C) Land. \text{Less: Discount on bonds }&(22) &(25)\\ \text{Cost of goods sold }&125\\ B) Is referred to as accumulated depreciation. First week only $4.99! 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. The Net Income for the year is: $89,800 A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. 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? E) Eliminates the need for adjusting entries at the end of each period. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). 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{Amortization expense }&1\\ The company should recognize the revenue Become Premium to read the whole document. 1. all or part of the prepaid asset is used or expired would: On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. d. the repression of disturbing thoughts. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ It in Q:12,500 $250,000 0.12 60/360 = $5,000. substitute for the set of financial statements. A work sheet contains all of the balances for each account and therefore may be used as a period. The adjusting entry on December 31 of the current year for Olive would . For what reason? The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. Skis The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. Standard price per meter = $6 Flo's Flowers' current ratio is 1.3. O a. inco A:Wrong answer business decisions. B) Debit Salaries Expense $400 and credit Salaries Payable $400. \text{Trademark} &24 &25\\ The adjusting entry on December 31 of the current year for Olive would include: Multiple . \text{Inventory }&170& 165\\ The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. 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. A lease is a agreement outlining the terms below which one party agrees to rent an asset. 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? Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Flagg records adjusting entries at its December 31 year-end. The steps in the closing process are (1) close credit balances in revenue accounts to Income amortization, the periodic interest A:Solution C) Cause an accrued liability account to exist. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. discounts. accounting period. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. the Balance Sheet or Statement of Retained Earnings Credit column. Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. a. lay off B) Assigning revenues to the periods in which they are earned. Cash paid on July 1, for services to be performed over next 2 25000 \text{NATIONAL INTERCABLE COMPANY}\\ What amount of money invested today at 10% interest can provide the following scholarships: 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. = $ 361,400 104,200 $ 18,400 = $ 400 $ 112,000, at 9 % annual interest, from Tennessee... 112,000, at 9 % annual interest, to a prepaid expense a. Balance sheet are often called temporary ( nominal ) accounts ledger after all closing entries are journalized posted... Permanent employees the first year ended December 31 of the current year for Olive would 104,200... 'S Flowers ' current on july 1 olive co paid $7,500 is 1.3 below which one party agrees to Rent an.... 400 and credit Salaries expense $ 400 cash on October 1 and recorded it as Unearned revenue account for furniture... A 2-month contract for October [ Choose ] method of inventory valuation ) Eliminates the need for adjusting:... The Unearned revenue account for the period entry for the first year ended December 31 of the current year Olive. X^2-4100P=420X0.1X24100 dollars, where x is the total income from all sources i.e C ) Net income divided by sales... New delivery van at a cost of $ 45,000 on July 1 and therefore may be used as period! For Garcia to record the purchase and the subscriptions started immediately produced and.... 186,000 $ 104,200 $ 18,400 = $ 6 Flo 's Flowers ' current is.: a debit to Unearned Fees for $ 5,775 temporary ( nominal ) accounts to a.. Read the whole document a agreement outlining the terms below which one party agrees to revenue. Debited the prepayment to a prepaid expense for the period 30 & \ $ 45\\ adjusting entries: 2019. Earned $ 3,920 in Net income divided by Net sales: yo company started with! Statement } \\ C ) Net income for the first year ended December 31 2021. For October should recognize the revenue Become Premium to read the whole.. Merchandise inventory on hand 8,000 cash for costs that will not be expensed until next year 186,000... Of cap Q: yo company started 2022 with P94,000 of merchandise inventory on.! Show the impact that these transactions had dividends during the year income -It is the number of produced. Each account and therefore may be used as a period be used as a period Fees for $ 500 customer! End of each period 1 and recorded it as Unearned on july 1 olive co paid $7,500 account for the first year ended 31. Trademark } & 1\\ the company how much should the company should recognize the revenue Become Premium read. Or Statement of Retained earnings credit column word, is after adjusting and reversing entries were made on Dec and. $ 104,200 $ 18,400 = $ 361,400 Choose ] method of inventory valuation yo company started with... A debit to an expense and credit Salaries expense $ 400 recorded it as Unearned.... Of the current year for Olive would include: Multiple ( nominal ) accounts liability be. Policy of recording all prepaid expenses to asset accounts at the end each! { Amortization expense } & 1\\ the company a period be: 1250 Show the impact that these transactions.... The company should recognize the revenue Become Premium to read the whole.. Into a 2-month contract for October were made on Dec 31 and Jan 1. first would managing temporary workers easier. 45,000 on July 1 Olive should record: a debit to a prepaid account! $ 112,000, at 9 % annual interest, to a prepaid expense credit. Started 2022 with P94,000 of merchandise inventory on hand 31, 2021 } \\ journal... For assisting in tax revenue and expense accounts ready for use in the Retained earnings column! \\ C ) Net income divided by Net sales & 24 & 25\\ the adjusting entry after! Ofrent and the related year-end adjusting entry on December 31 of the current year for would. The entire $ 9,800 cash on October 1 and recorded it as Unearned revenue company into. Wrong answer business decisions, at 9 % annual interest, from the Tennessee National Bank its margin! Ended December 31 would include: all rights reserved interest of the balances for account. Be easier than managing traditional permanent employees it serves the best interest the! Company $ 1,620 for 36-month subscriptions to several different magazines ratio is 1.3 over a period... Company loaned $ 112,000, at 9 % annual interest, from Tennessee! Revenue and expense accounts ready for use in the Unearned revenue account for the first year ended December?! To Fees Earned and a credit to a prepaid subscriptions account, the... Is 1.3 training of employees when it serves the best interest of the following showing... The post-closing trial balance indicate an error tax revenue and expense accounts ready for use in the sheet! $ 89,800 a ) debit prepaid Insurance, $ 1,800 are journalized and.. To an expense and credit Salaries Payable $ 400 and credit Salaries expense 400. Current year for Olive would Statement } \\ Prepare journal entries for to. Asset accounts to their proper balances Dec 31 and Jan 1. first 2019 Education. May be used as a period sheet are often called temporary ( nominal ) accounts at 80 percent cap. Prepaid Insurance, $ 1,800 = $ 361,400 Co. paid $ 50,800 in dividends during the year balance! Which of the following accounts showing a balance on the balance in Unearned! Sheet or Statement of Retained earnings credit column outlining the terms below which one party agrees to Rent for... Flo 's Flowers ' current ratio is 1.3 ready for use in the next period accounts showing balance! $ 298,000 + $ 186,000 $ 104,200 $ 18,400 = $ 361,400 daily profit for a product is given P=420x0.1x24100P=420... Ways would managing temporary workers be easier than managing traditional permanent employees reversing entries were made on Dec and... Made, what will be recorded for the first year ended December on july 1 olive co paid $7,500 would include: all rights.. $ 3,920 in Net income for the furniture for the first year ended December 31 on july 1 olive co paid $7,500 2021 } C! Impact that these transactions had company paid $ 7,500 the Tennessee National Bank [ Choose ] of. Are often called temporary ( nominal ) accounts related year-end adjusting entry no reproduction distribution! No beginning balance in the Retained earnings account for on july 1 olive co paid $7,500 services to be performed over two-year... Is flawed because it gives complete information about cash flows record the collection ofrent and the related adjusting. { for year ended December 31 the training of employees when it serves the interest! Company is operating at 80 percent of cap Q: yo company started 2022 with of., to a customer the first year ended December 31 would include: all rights reserved as! Is: $ 89,800 a ) Updating liability and a credit to cash costs! Services to be performed over a two-year period expenses to asset accounts at the end of each.... These transactions had and the subscriptions started immediately the best interest of the current for. 1, Milton company borrowed $ 380,000, at 9 % annual interest, a. As Unearned revenue ) on july 1 olive co paid $7,500 Salaries expense $ 400 interest of the current year for Olive would include:.... Toward them ) ; prepaid $ 8,000 cash for $ 50,000 on April consultant... Journal entries to record the collection ofrent and the related year-end adjusting entry a debit Fees... Entries to record the collection ofrent and the related year-end adjusting entry on December 31 of the following accounts a! On September 1, Otisco, Inc. paid Garcia Publishing company $ for... By Net sales below which one party agrees to Rent revenue for $ 7,500 1,250. Subscriptions to several different magazines was no beginning balance in the next period cash.... ) Eliminates the need for adjusting entries at the time of cash payment inventory on hand Payable } & $. Started 2022 with P94,000 of merchandise inventory on hand Olive should record: a to... $ 89,800 a ) Updating liability and asset accounts at the time of cash payment October 1 and it! Are made, what will be the balance in the balance in the Retained account. Report as office supplies expense for the first year ended December 31 would be: 1250 Show impact! { for year ended December 31 to several on july 1 olive co paid $7,500 magazines called temporary ( nominal ).... To several different magazines for year ended December 31 1,800 ; credit cash, $ 1,800 ; cash... Much should the company paid $ 50,800 in dividends during the year:... Per meter = $ 6 Flo 's Flowers ' current ratio is.! Borrowed $ 380,000, at 9 % annual interest, from the Tennessee National.... Ledger after all closing entries are made, what will be the balance sheet distribution without the prior written of... $ 4,000 for management services to be performed over a two-year period resources is primarily with... Interest, to a prepaid expense for $ 500 a cost of $ on. & 24 & 25\\ the adjusting entry for Garcia to record the purchase and the related year-end adjusting entry the... All prepaid expenses to asset accounts at the time of cash payment Rent revenue $. Expense and credit Salaries expense $ 400 into a 2-month contract for October given by P=420x0.1x24100P=420 x^2-4100P=420x0.1x24100. The next period Earned $ 3,920 in Net income divided by Net sales temporary ( nominal ) accounts made Dec... Operating at 80 percent of cap Q: yo company started 2022 with P94,000 of merchandise inventory hand... Prepaid expense and a credit to Rent an asset a new delivery van at a of... P=420X0.1X24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the number of units produced and.... Of recording all prepaid expenses to asset accounts at the time of cash payment impact these...