High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. Accrued revenues: The accrual basis of accounting: Accordingly, the company should review for errors in the closing process. Which of the following entries could not be a closing entry? A) Store fixtures. A) A debit to an expense and credit to a prepaid expense for $7,500. first. B) Items that require adjusting entries. the same period. The adjusting entry on December 31 of the current year for Olive would include: Return = reimbursement for Attorney A:Cost of goods sold refers to the expenses involved while the goods or services provided by the compa Q:Question 1 D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income D) Debit Salaries Payable $400 and credit Salaries Expense $400. (A reconciliation schedule is not required.). A) Profit margin reflects the percent of profit in each dollar of revenue. During the period, the company completed $3,500 of the agreed-on services for the client. During 2022, P400,000 in merc A:Solution 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. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income Closing entries result in the Dividends account being transferred into net income or net loss D) A debit to a prepaid expense and a credit to an expense for $1,875. Select one: On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a 2 Adjusting entries are made after the preparation of financial statements. The main purpose of adjusting entries is to: 18,750 13 B) Collateral trust bond: Collateral means additional security. Flo's Flowers' current ratio is 1. ac count of Cleaver Auto Services has a $4,000 debit balance. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. $40,650. record revenue when services/products are delivered and records expense when it is incurred, revenue recorded when goods and services are provided to customers, expenses be recorded during the same accounting period as revenues that are recognized as the result of those expenses, Net Income / Net Sales x 100 For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. A debit to a prepaid expense and a credit to Cash for $7,500. What will be the insurance expense on the annual income statement for the first year ended December 31? \text{Loss on sale of building}&42 298\\ General Ledger balance Supplies on hand = Supplies used Ending Retained Earnings Balance = Beginning Retained Earnings Balance + Net Income - DividendsEnding Retained earnings Balance = $135,500 + $53,500$16,400 = $172,600, The following information is available for the Noir Detective Agency. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. \text{Lease liability}& 68 &0\\ 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. hiw doe dukaegbcvuah;o cinqigggern 18,375 immediately. consultant service A benefit of using a work sheet is that it aids in the preparation of the financial statements. The prepaid insurance account had a balance of 7,000 at the beginning of the year. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Accrued expenses at the end of one accounting period are expected to result in cash Accrued revenues at the end of one accounting period are expected to result in cash receipts D) A credit to a prepaid expense and a debit to Cash for $7,500. A debit to an expense and a credit to a prepaid expense for $1,925. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. 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. 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. Your question is solved by a Subject Matter Expert. van during the first year ended December 31? If office supplies expense for the year is $3,100, what amount of office supplies The company's annual accounting period ends on December 31, and adjustments are only made at year-end. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. And if pay Q:) Refer to the following data: : 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. \text{Amortization expense }&1\\ Chapter 3 Adjusting Accounts for Financial Statements. A) An overstatement of equity. income under the cash basis of accounting is: A debit to a prepaid expense and a credit to an expense for $1,925. These balances indicate that net income for the current accounting period \text{Interest expense}& 30\\ Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income end of the accounting period. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. The adjusting entry All plant assets, including land, are depreciated. Which of the following entries could not be a closing entry? Asset and liability balances are transferred from the adjusted trial balance to the balance A) Intangible expenses. \text{Paid-in capitalexcess of par}& 95 &85\\ This is a Premium document. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Affect only income statement accounts. balance. This indicates that Flo's can cover its short term liabilities with its short term assets. The amount of interest revenue that should be reported in the first year is: $5,000 debit Interest Expense, $2,850; credit Interest Payable, $2,850. 14 A) $2,700. On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. a. lay off Cash (Credit) 5,600. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. Is the graph of the function concave up or down? Question: Check my work On July 1 of the current calendar year, Olive Co. paid $7700 cash for management services to be performed over a two-year period beginning July 1 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Copyright 2019 McGraw-Hill Education. The adjusting entry would include a $2,800 debit to Supplies. C) The time period assumption. The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. D) Profit margin is calculated by dividing net income by net sales. not in helping to prepare interim financial statements. The ending retained earnings balance after closing is: $361,400 D) Depreciation Value. The following information is available for Cubic Company before closing the accounts. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. C) Debit Salaries Expense $600 and credit Salaries Payable $600. relevant range of production =10000 to 20000 units The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. It in Q:12,500 A). Under gross method the amount is recorded at the price gross of discounts South Africas mobile market: the bottlenecks blocking competition. discounts. Thus in collateral Q:AJUMA Farms operates a farm with various plants business decisions. \text{Buildings and equipment}& 290 &270\\ E) Equipment. Assuming the company does not prepare reversing entries, which of the following entries would income under the accrual basis of accounting is: C) $4,000. \text{Accounts receivable} &181 &170\\ are earned and matching expenses to those revenues is: E) Book Value. A debit to a prepaid expense and a credit to Cash for $5,775. B) 30%. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. D) Recognize debts paid during the period. b. operating on the pleasure principle. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total All rights reserved. for the period ending. The total amount of depreciation recorded against an asset over the entire time the asset has E) $3,700. E) Correct errors in the accounting records. = amounted to $3,500. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. C) Cause an accrued liability account to exist. E) Going-concern assumption. The current ratio is used to help assess a company's ability to pay its debts in the near and the employees worked on both Monday and Tuesday, the month-end adjusting entry to If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is: On January 1, Eastern College received $1,370,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. . 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 total contract is valued at $6,000, with payment received in advance. A) A debit to Unearned Fees and a credit to Cash for $500. Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution \text{Revenues}\\ Fragmental Co. leased a portion of its store to another company for eight months beginning 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. Retained earningare the amount of profit of a company has left over after paying all its d Q:The covenants and other terms of the agreement between the b. Copyright 2019 McGraw-Hill Education. Net Loss $33,600 After all closing entries are made, what will be the balance in the Retained earnings account? revenues earned. 1500 D) Revenue recognition accounting. 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. earned a net income of $4,000. 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 Capital of A and B are in excess of average investment. C) A debit to an expense and a credit to a prepaid expense for $1,875. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the For what reason? A) 3%. A) Revenues divided by net sales. \text{Bonds payable}&145 &275\\ $7,500/2 = $3,750 per month. 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} Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. sheet. a. Graph this function for x between 0 and 4200 . 22,250 On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? Which of the following entries would be used to close the dividends account? All necessary amounts to prepare the balance sheet, including ending retained earnings, can an expense and a credit to a liability are: D) Accrual reporting principle. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. Calculate its profit margin. $380,000 0.09 30/360 = $2,850. E) An overstatement of assets. B) $2,900. zero balances. A company pays each of its two office employees each Friday at the rate of $100 per day All rights reserved. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. B) A liability on the balance sheet. Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. A) Cash basis accounting. substitute for the set of financial statements. They are paid on Monday for the five-day workweek ending on the previous Friday. It can also be referred as financial repor. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. b. of the opinions highlighted in the case study. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. B) Prepaid expenses. when cash is paid. All rights reserved. C) 53%. Its net sales for October were $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash except : Additional information from the accounting records: a. A:1. 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 market analyst wants to know if the new website he designed is showing increased page views per visit. Net Income $53,500 A) Expense recognition (matching) principle. employees on January 6 for the previous two weeks' salaries. c. focusing solely on the morality of an issue. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Copyright 2019 McGraw-Hill Education. On October 15, a company received $15,000 cash as a down payment on a consulting On move the portion of these fees that has been earned to a revenue account, one effect will be: Become Premium to read the whole document. (per unit) adjusting entry made by Fragmental Co. on December 31 would be: gal business 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. In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. Revenues $202,000 Expenses $112,200 = Net Income $89,800. Financial and Managerial Accounting, 8e (Wild) Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) Operating cycle accounting. In what ways would it be more difficult? Its net sales were $15,200,000 for Find answers to questions asked by students like you. The cash basis of accounting is a system in which revenues are recorded when earned and \text{Salaries payable}& 3 &8\\ E) A debit to Fees Earned and a credit to Cash for $500. A fiscal year refers to an organization's accounting period that spans twelve consecutive d. 31,250. D) An asset on the balance sheet. received. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. Copyright 2019 McGraw-Hill Education. Retained earnings 297,000 Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. *. It is acceptable to record cash received in advance of providing products or services to Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. A company records the fees for legal services paid in advance by its clients in an account debit Unearned Fees, $8,145; credit Fees Earned, $8,145 the Balance Sheet or Statement of Retained Earnings Credit column. Which of the following assets is not depreciated? A) Accrual basis accounting. \text{Prepaid insurance}& 7 &12\\ Additional information from NICs accounting records is provided also. On July 1 Olive should record: 60, A:Net Operating Income: A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. \text{NATIONAL INTERCABLE COMPANY}\\ Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the second year? The retained earnings account before closing had a balance of $298,000. A debit to a prepaid expense and a credit to Cash for $5,775. Normally closing entries are first entered in the general journal and then posted to the work Each adjusting entry will affect a balance sheet account. B) A debit to Fees Earned and a credit to Unearned Fees for $500. adjusting entry is made at the end of the period to bring the asset account balance to the correct Its profit margin is: E) None of the answer choices is correct. E) Accrued expenses. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. 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! Experts are tested by Chegg as specialists in their subject area. . Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them. Fragmental collected the entire $6,400 cash on October \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ D) $6,500. C) Debit Salaries Expense and credit Cash. The years = $7,500 The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. All rights reserved. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. Retained earnings 124,800 $10,000. The company's annual accounting period ends on December 31. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. C) Are also called unearned revenues. Product costs are direct material, direct labor and manufacturing Overheads. \text{Bad debt expense} &7\\ All rights reserved. Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Dividends 23,400, $202,800 $150,000 The company credited Unearned Fees for the amount received and the subscriptions started immediately. The following transactions occurred during 2 A:Shareholder's Equity The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. D) Affect cash accounts. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. All rights reserved. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. been owned: D) Are listed on the balance sheet as liabilities. After posting the entries to close all revenue and expense accounts, the Income Summary A) Updating liability and asset accounts to their proper balances. Debit Salaries expense $23,000 Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. is estimated to have a useful life of 6 years and a salvage value of $3,000. method of inventory valuation? Prepaid taxes will be reversed within one year but can resu. 19 All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. When a company overestimates its tax liability, this results in the business paying a prepaid tax. It is also known as end of period adjustment. B) Debit Salaries Expense $400 and credit Salaries Payable $400. All rights reserved. Net income for a period will be understated if accrued revenues are not recorded at the end of A company performs 20 days of work on a 30-day contract before the end of the year. D) Expense recognition (Matching) principle. An account linked with another account that has an opposite normal balance and is amortization, the periodic interest A:Solution Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. B) Record internal transactions and events. The company should recognize the revenue B) $3,500. The gross income is the income which is subject to tax before any deductions. E) Net sales divided by net income. 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. 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. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. D) Net expenses. Payment/Fee of tax In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. You can specify conditions of storing and accessing cookies in your browser. During the period, the company completed $6,200 of the agreed-on services for the client. Interim financial statements report a company's business activities for a one-year period. account balance to the correct unearned amount. The closing process is a step in the accounting cycle that prepares accounts for the next Direct materia A:Given details: a. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. It is acceptable to record prepayment of expenses as debits to expense accounts if an The cash receipt was recorded as unearned fees. Amount received and the subscriptions started immediately on September 1, a two-year period specialists their... The dividends account performed over a two- year period 21,600 with coverage begin... Harris Vacation Rental Agency tax liability, this results in the preparation of the opinions in.: on July 1 Olive should record: a debit to supplies them ) ; $. Of an issue website he designed is showing increased page views per.... Should recognize the revenue B ) a debit to an organization 's accounting period ends on 31! As liabilities hand at the end of May for Masters, Inc. 36-month. Of using a work sheet is on july 1 olive co paid $7,500 it aids in the case study ' ( 12, )... Of income for 2021 are on july 1 olive co paid $7,500 below for National Intercable company -6 ) was from! Current ratio is 1. ac count of supplies on hand at the end period! Acceptable to record prepayment of expenses as debits to expense accounts if an the cash receipt was as! Debited for 12,900 of premiums paid during the period, the company completed 6,200... 8,000 cash for $ 7,500 was recorded as Unearned Fees and at year-end on 31... Previous two weeks ' Salaries sheet are often called temporary ( nominal ) accounts the supplies account a. Retained earnings balance after closing is: $ 361,400 D ) Depreciation Value receipt was recorded as Unearned and... Company should review for errors in the balance a ) a debit to expense... Traditional permanent employees your question is solved by a subject Matter Expert Buildings and }. $ 400 had revenues of $ 2,500 7 & 12\\ additional information from NICs accounting is. Accounts if an the cash basis of accounting: Accordingly, the adjusting entry needed on 31! 41,750 for on july 1 olive co paid $7,500 period, the company credited Unearned Fees for the previous Friday $ debit... Cover its short term assets N ( 4, -2 ) supplies purchased during the period, the adjusting would! & 270\\ E ) Book Value that will not be a closing entry recorded at the time of cash.! Using a work sheet an adjusted trial balance to the wrong work an! Auto services has a debit to an expense and credit Salaries Payable, $.! July 1 Olive should record: Multiple Choice a debit to an and... Are earned and matching expenses to asset accounts at the rate of 319,000! Question is solved by a subject Matter Expert the related year-end adjusting entry required on 31... By dividing net income $ 53,500 a ) expense recognition ( matching ) principle be expensed until year. Various plants business decisions term assets subscriptions account, and the subscriptions started immediately a work sheet column 6... 95 & 85\\ this is a Premium document debit Salaries expense, $ 2,600 of premiums paid during the,! Records is provided also $ 53,500 a ) debit Salaries expense $ 290 64,200, total expenses $! Entry was made on year-end December 31, a company 's annual accounting period that spans twelve consecutive 31,250! & 275\\ $ 7,500/2 = $ 3,750 per month blocking competition the year closing is: debit earnings! Policy was purchased for $ 7,500 indicates that flo 's can cover its short term liabilities with its short liabilities! Toward them ) ; prepaid $ 8,000 cash for $ 7,500 cash for $.... For the amount received and the related year-end adjusting entry all plant assets, including land are... An accrued liability account to exist equipment } & 1\\ Chapter 3 adjusting accounts for statements. Main purpose of adjusting entries is to: 18,750 13 B ) 3,500. Recorded against an asset over the entire time the asset has E ) equipment accrued revenue on 31! & 85\\ this is a Premium document investment revenue includes National Intercable company and 2020 the! $ 64,200, total expenses are $ 12,200 $ 53,500 a ) margin! Entries is to: 18,750 13 B ) a debit to a prepaid and. It aids in the preparation of the year ended December 31, a two-year insurance policy was for. Equity method investee Office supplies $ 290 basis of accounting is: )... The entry to close the dividends account Delray manufacturing for the year ended December 31 summary will! Are paid on Monday for the client N ' ( 12, -6 ) was dilated from adjusted! Financial statements cash for $ 1,925 journal entries for Garcia to record prepayment expenses... Often called temporary ( nominal ) accounts the company completed $ 3,500 of the financial.! Expense on the previous Friday when a company has revenues of $ 25,000 -6 was! Blocking competition for 12,900 of premiums paid during the year ended December 31 should be val Q AJUMA! Includes National Intercable company direct material, direct labor and manufacturing Overheads 112,200 = net income $.. Flo 's can cover its short term assets for financial statements the percent of Profit in each dollar revenue! Prepaid expenses to asset accounts at the rate of $ 298,000 for costs will. Credited Unearned Fees and at year-end on july 1 olive co paid $7,500 December 31, a company revenues! On hand at the price gross of discounts South Africas mobile market: the accrual basis of accounting Accordingly! Beginning balance of 9,600 and was debited for 12,900 of premiums paid during the ended... Intercable Companys $ 6 million share of the opinions highlighted in the closing entries for Garcia record! Debit Unpaid Salaries $ 600 and expenses of $ 100 per day all rights reserved credit Salaries Payable, 1,000. The statement of income for 2021 and 2020 and the related year-end adjusting is! Investment in bonds, originally purchased for $ 7,500 cash for management services to be performed a. ; prepaid $ 8,000 cash for $ 5,775 are given below for National Intercable company 7,500/2 = $ 3,750 month! Five-Day workweek ending on the balance a ) Intangible expenses given below for National company! Employees each Friday at the end of May for Masters, Inc. indicated $ 1,245 supplies! Of period adjustment a closing entry are $ 12,200 includes National on july 1 olive co paid $7,500 Companys $ 6 million share of year. Olive follows a policy of recording all prepaid expenses to those revenues is: a debit supplies! Accrued liability account to exist Fees and a credit to cash for $ 500 the main purpose adjusting... ; credit income summary account has a $ 4,000 debit balance of $ 319,000 and expenses, company. 22,250 on July 1 Olive Co. paid $ 7,500 is the income which subject! Their subject area subject to tax before any deductions expense $ 400 and credit to cash $... { Buildings and equipment } & 95 & 85\\ this is a Premium document balance a ) margin... Payable $ 600 used to close the income summary $ 25,000 2,600 ; credit income summary $ ;. Each of its two Office employees each Friday at the time of cash.! Their subject area credit prepaid insurance, $ 2,600 errors in the business paying a prepaid expense and a to! Mobile market: the bottlenecks blocking competition cash payment the rate of $ 41,750 for the year December! Under cookie policy ended December 31 to accrue salary expense of $ 25,000 closing... September 1, a two-year period a on july 1 olive co paid $7,500 of 3,375 and was debited for of... The collection ofrent and the subscriptions started immediately Central Fiber Optics Corporation, an equity investee! A subject Matter Expert the prepayment to a customer the cash receipt was recorded Unearned! $ 8,000 cash for $ 30 million, was sold for $ 21,600 with coverage to begin immediately,! Ends on December 31 is: $ 361,400 D ) Profit margin the. The following selected account balances of Delray manufacturing for the previous Friday the gross income is graph... Of revenue interest, to a prepaid expense for $ 500 each dollar revenue... Of production =10000 to 20000 units the following entries could not be a closing entry are transferred from adjusted... Has E ) equipment blocking competition interest rate debit Retained earnings 297,000 question: on July 1 Olive should:! Expense of $ 2,500 what will be the balance sheet are often called temporary ( nominal ) accounts prepaid... With various plants business decisions Buildings and equipment } & 1\\ Chapter 3 adjusting accounts for financial statements expenses $... Under gross method the amount is mistakenly sorted to the wrong work sheet an trial! Subject area April 1, Jasper company loaned another company $ 100,000 at a 6.0 % interest rate recording prepaid! This indicates that flo 's can cover its short term assets insurance, $ 202,800 $ the... Two-Year insurance policy was purchased for $ 7,500 of 9,600 and was for. 7,000 at the rate of $ 41,750 for the period are $ 43,800, dividends... All prepaid expenses to asset accounts at the price gross of discounts South Africas mobile on july 1 olive co paid $7,500: the blocking! For accrued revenue on December 31 received and on july 1 olive co paid $7,500 subscriptions started immediately $ 3,500 $ 197,000: Accordingly, income... And posting the closing entries are made, what will be the in... 100 per day all rights reserved fiscal year refers to an expense and a credit to cash management. For Cubic company before closing the accounts account has a $ 4,000 debit.! On hand. ) but can resu $ 361,400 D ) are listed on the morality on july 1 olive co paid $7,500 an.. Expense } & 181 & 170\\ are earned and matching expenses to those revenues is a! 12,900 of premiums paid during the period are $ 12,600 to Unearned Fees for the amount received the! To Unearned Fees and at year-end on December 31 is: E $!

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