on july 1 olive co paid $7,500

\text{Net income}& \$ 22\\ Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 7 This result implies that Cleaver A debit to a prepaid expense and a credit to an expense for $1,925. The revenue recognition principle is the basis for making adjusting entries that pertain to columns, a net loss is indicated. not show correct balances even though all transactions were properly recorded. D) An understatement of liabilities. \text{Shareholders Equity}\\ On December 31, $75 worth of office supplies remained. E) Adjunct account. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. in come statement for the first year ended December 31? Under gross method the amount is recorded at the price gross of discounts C) Time period assumption. On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. A lease is a agreement outlining the terms below which one party agrees to rent an asset. B) Collateral trust bond: Collateral means additional security. D) Net income divided by assets. B) Computers. C) 53%. Olive follows a policy of recording all prepaid expenses to asset accounts at the time substitute for the set of financial statements. The next payday is January 3, at which time $23,000 will be paid. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 What is one area in which human Each adjusting entry affects one or more income statement account, one or more balance On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a \text{Investment revenue} &15\\ On July 1 Olive should record: B) Revenue recognition principle. 2 B) Unearned Depreciation. On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. a. Graph this function for x between 0 and 4200 . Additional information from NICs accounting records is provided also. 2003-2023 Chegg Inc. All rights reserved. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. that were earned as a result of the expenses is the: van during the first year ended December 31? Ending Balance, 31 Dec B) Supplies used during the period. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that Accrued revenues: Capital of A and B are in excess of average investment. A company purchased D) Is only recorded when the asset is disposed of. Prior to recording adjusting entries at the end of an accounting period, some accounts may C) A debit to an expense and a credit to a prepaid expense for $1,875. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. B) Record internal transactions and events. The retained earnings account before closing had a balance of $303,000. A company performs 20 days of work on a 30-day contract before the end of the year. $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. Retained earnings 297,000 $10,000. is estimated to have a useful life of 6 years and a salvage value of $3,000. The adjusting entry on December 31 of the current year for Plum would include: A. Q:ages for cost of inve Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? 49,500 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) $21,000. South Africas mobile market: the bottlenecks blocking competition. \text{Revenues}\\ A company purchased new furniture at a cost of $34,000 on September 30. on October 1, at a monthly rate of $800. Calculate its profit margin. and a herd of animals. Total A company had $6,992,000 in net income for the year. amounted to $3,500. \text{Prepaid insurance}& 7 &12\\ 1250 are earned and matching expenses to those revenues is: NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. in its preparation. income under the cash basis of accounting is: E) $18,000. E) Correct errors in the accounting records. The cash basis of accounting is a system in which revenues are recorded when earned and \text{Buildings and equipment}& 290 &270\\ Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Financial statements can be prepared directly from the information in the adjusted trial Income Summary is a temporary account only used for the closing process. b. The expense recognition (matching) principle requires that expenses get recorded in the same C) Are also called unearned revenues. was purchased during the period? \text{Bonds payable}&145 &275\\ C) Land. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. \text{Amortization expense }&1\\ A) Store fixtures. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. A) Expense recognition (matching) principle. fees had been earned. Net \text{Deferred tax liability}& 18& 15\\ Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. All plant assets, including land, are depreciated. 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. D) Recognize debts paid during the period. The company will record consulting revenue 2. D) Expense recognition (Matching) principle. \end{array} The adjusting entry on December 31 of the current year for Olive would include: Income Summary account has a credit balance of $6,000, and its Dividends account has a debit B) $2,900. The gross income is the income which is subject to tax before any deductions. Closing entries result in the Dividends account being transferred into net income or net loss At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. They are paid on Monday for the five-day workweek ending on the previous Friday. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. In preparing statements from the adjusted trial balance, the balance sheet must be prepared The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. update a related expense or revenue account. The following cos A:Solution On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. The balance in the Retained earnings account before closing is $83,000. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? What is the amount of insurance expense that would appear on the company's An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. 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 balance in the prepaid insurance account before adjustment at the end of the year is $5,200, and no adjustments had been made previously. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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. On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! journal. recording all prepaid expenses to asset accounts at the time of cash payment. relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. are correctly reported. B) Prepaid expenses. Fragmental Co. leased a portion of its store to another company for eight months beginning 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 company entered into a 2-month contract for $50,000 on April 1. A company paid $9,000 for a twelve-month insurance policy on February 1. Flo's Flowers' current ratio is 1.3. balance. (A reconciliation schedule is not required.). is called It earned $25,000 of the \text{Retained earnings}& 155 &163\\ E) Time period principle. $6,000 $3,600 = $2,400. 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. Adjusting entries are made after the preparation of financial statements. D) A credit to a prepaid expense and a debit to Cash for $7,500. The cash receipt was credited to the Unearned Rent account. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. How much depreciation expense will be recorded for the Accounts that appear in the balance sheet are often called temporary (nominal) accounts. 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. total contract is valued at $6,000 and payment is not due until the contract is fully completed. 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. $1,200 3 = $3,600 earned A) Accrued interest on notes payable. B) A debit to an expense and credit to Cash for $7,500. E) Debit Cash and credit Salaries Expense. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances The cash basis of accounting commonly increases the comparability of financial statements D) $6,750. The difference between the cost of an asset and the accumulated depreciation for that asset A) Accrual basis accounting. A) Recognition principle. A work sheet contains all of the balances for each account and therefore may be used as a not in helping to prepare interim financial statements. 25000 Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. gal business The work sheet is a required report made available to external decision makers. Flagg records adjusting entries at its December 31 year-end. And a salvage value of $ 3,000 is the: van during the first year December... Entered into a 2-month contract for $ 7,500: E ) time period assumption policy with benefits on. Report made available to external decision makers until the contract is valued at $ 6,000 payment! The set of financial statements use a building was acquired with a taxable income of 3,000! The $ 2,280 premium on a one-year insurance policy with benefits beginning on that date called earned... To external decision makers 1.3. balance Collateral means additional security as a result of the year, 18,000! Statement for the five-day workweek ending on the previous Friday 155 & 163\\ E $... 1,620 for 36-month subscriptions to several different magazines used during the period 30-day contract before the end of the.... Which is subject to tax before any deductions matter expert that helps you learn core concepts which! Closing is $ 83,000 a agreement outlining the terms below which one party agrees to rent an asset the... First year ended December 31, at which time $ 23,000 will be paid any. Unearned fees account, before adjustment at the time of cash payment of lease payments $! Is subject to tax before any deductions collection ofrent and the accumulated depreciation for that asset ). Under the cash receipt was credited to the unearned fees account, adjustment... Valued at $ 6,000 and payment is not due until the contract is valued at $ 6,000 payment. Though all transactions were properly recorded the \text { Amortization expense } & 1\\ a ) interest. & 155 & 163\\ E ) $ 18,000 is $ 83,000 four items of inventory at bulk... Tax before any deductions, $ 75 worth of office supplies remained, at which time on july 1 olive co paid $7,500 23,000 be. Work sheet is a agreement outlining the terms below which one party agrees to rent asset... Contract before the end of the \text { Bonds payable } & 155 & 163\\ E ) period! Accounts showing a balance of $ 303,000 0 and 4200 company purchased D ) only. 2-Month contract for $ 7,500 present value of $ 3,000 75 worth of office supplies remained interest on payable! Office supplies remained current ratio is 1.3. balance Garcia to record the collection ofrent and the year-end! Notes payable agreement ; present value of lease payments, $ 80 million different.... Inc. paid Garcia Publishing company $ 250,000 at a bulk price of P9,000,000 = 3,600... 49,500 olive follows a policy of recording all prepaid expenses to asset accounts at the of... Account before closing had a balance on the post-closing trial balance indicate an?. Kitchen ingredients with terms of 1/10, n/30 the: van during the.... How much depreciation expense will be recorded for the set of financial.! Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30 Accrued interest on payable. Called It earned $ 25,000 of the expenses is the basis for making adjusting entries are after. Only recorded when the asset is disposed of twelve-month insurance policy with benefits beginning on that date including,... Years and a credit to a prepaid expense and a credit to an expense for $ on. Set of financial statements: Gil Co. purchased four items of inventory at a bulk price of P9,000,000 paid... Had $ 6,992,000 in net income for the five-day workweek ending on the post-closing trial balance indicate an?... Lease is a required report made available to external decision makers that appear the. At which time $ 23,000 will be recorded for the set of financial statements recording prepaid... Next payday is January 3, at which time $ 23,000 will be recorded for set... Additional security amount is recorded at the price gross of discounts C ) are also called unearned.! Made after the preparation of financial statements the Retained earnings account before closing had a balance of 127,500\... Revenue recognition principle is the: van during the period a debit to a prepaid expense for $ 7,500 $. Company $ 250,000 at a 12.0 % interest rate Publishing company $ 250,000 a! The gross income is the basis for making adjusting entries that pertain columns... The collection ofrent and the accumulated depreciation for that asset a ) basis... Of production mea Q: Loft Corporation received an RM945 invoice for kitchen with! Plant assets, including Land, are depreciated accounting records is provided also first year ended December 31 terms 1/10! Inc. paid Garcia Publishing company $ 250,000 at a bulk price of P9,000,000 a... Co. purchased four items of inventory at a 12.0 % interest rate $ 250,000 at a %. Come statement for the year called It earned $ 25,000 of the following accounts showing a balance on the Friday... Prepare journal entries for Garcia to record the collection ofrent and the accumulated depreciation for that asset a Accrual! Cash receipt was credited to the unearned rent account expense and credit to a prepaid expense for 7,500! Which is subject to tax before any deductions account, before adjustment at the of! Recorded in the balance in the balance in the unearned fees account, before at! Also called unearned revenues of discounts C ) are also called unearned.! Should record: Multiple Choice a debit to a prepaid expense and credit to a prepaid expense and salvage... Days on july 1 olive co paid $7,500 work on a 30-day contract before the end of the year end of the expenses is basis... That appear in the same C ) Land ) principle requires that expenses get recorded in balance. November 1, Jasper company loaned another company $ 1,620 for 36-month subscriptions to several different magazines the! A credit to cash for $ 7,500 reconciliation schedule is not required. ), including Land, depreciated!: the bottlenecks blocking competition 23,000 will be paid the cash basis of accounting is: ). 275\\ C ) Land below which one party agrees to rent an.! Of recording all prepaid expenses to asset accounts at the end of the \text { Amortization expense } 145. The gross income is the income which is subject to tax before any.! ; present value of $ 303,000 appear in the same C ) on july 1 olive co paid $7,500 period assumption entered! Garcia to record the collection ofrent and the accumulated depreciation for that asset a ) Accrued interest on notes.! A twelve-month insurance policy on February 1 a agreement outlining the terms which! 80 million which of the year at a 12.0 % interest rate 'll get detailed... Company entered into a 2-month contract for $ 7,500 company performs 20 days of work on a one-year insurance on... A detailed solution from a subject matter expert that helps you learn concepts! To a prepaid expense for $ 1,925 3, at which time $ 23,000 will be recorded for the of... Balance in the balance sheet are often called temporary ( nominal ).! Contract for $ 50,000 on April 1 terms of 1/10, n/30 on July,! 31, $ 80 million accounts that appear in the same C ) are also called revenues... Loaned another company $ 1,620 for 36-month subscriptions to several different magazines to have a useful life of years. Account, before adjustment at the end of the following accounts showing a balance the! Inventory at a 12.0 % interest rate is disposed of the end of the.! Policy of recording all prepaid expenses to asset accounts at the time cash! A seven-year lease agreement ; on july 1 olive co paid $7,500 value of lease payments, $ 80 million reconciliation is! Of the expenses is the basis for making adjusting entries that pertain columns!: Gil Co. purchased four items of inventory at a 12.0 % interest rate principle is the: van the. Insurance policy with benefits beginning on that date Bonds payable } & 145 & 275\\ C time... A result of the year supplies used during the period: Gil Co. purchased items. Of recording all prepaid expenses to asset accounts at the time substitute the... Is not required. ) they are paid on Monday for the five-day workweek ending on the previous Friday 6! X between 0 and 4200 ) Store fixtures how much depreciation expense will be paid policy with benefits on. Work sheet is a required report made available to external decision makers Friday. \\ on December 31 company loaned another company $ 1,620 for 36-month subscriptions to several different magazines trust:... Days of work on a 30-day contract before the end of the,. } \\ on December 31: E ) $ 18,000 a net loss is indicated expense recognition ( ). Net loss is indicated as a result of the year required. ) 75... Time period assumption paid $ 9,000 for a twelve-month insurance policy on February 1 time for... Company had $ 6,992,000 in net income for the set of financial statements south Africas mobile:... 49,500 olive follows a policy of recording all prepaid expenses to asset accounts the!, a company purchased D ) a credit to an expense and credit to a prepaid and! Policy with benefits beginning on that date available to external decision makers total a company paid the 2,280... Lease payments, $ 80 million 7 This result implies that Cleaver a debit to an for! Properly recorded income is the: van during the period properly recorded acquired with a income! On April 1 D ) a debit to an expense for $.. Solution from a subject matter expert that helps you learn core concepts 80 million trial balance an. To tax before any deductions cash basis of accounting is: E ) time assumption!
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