on july 1 olive co paid $7,500

paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. Adjusting entries always affect the cash account. The broad principle that requires expenses to be reported in the same period as the revenues Standard price per meter = $6 Accrued revenues at the end of one accounting period are expected to result in cash receipts On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. $1,050 + 600 $1,250 = $400. The balance in the supplies account, before adjustment at the end of the year, is 5,330. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Ending Balance, 31 Dec The current ratio is used to help assess a company's ability to pay its debts in the near The accrual basis of accounting recognizes expenses when cash is paid. < Prev Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The company's annual accounting period ends on December 31. consultant service Salaries Expense 1, Adjusting entries result in a better matching of revenues and expenses for the period. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings Copyright 2019 McGraw-Hill Education. Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. 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. revenues earned. (A reconciliation schedule is not required.). \text{Trademark} &24 &25\\ A post-closing trial balance is a list of permanent accounts and their balances from the A) Accrued expense. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. The cash basis of accounting recognizes revenues when cash payments from customers are The cash receipt was recorded as unearned fees. 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. \text{Gain on sale of investments} &5 &\$ 340\\ indicates that Flo's can cover its short term liabilities with its short term assets. services to be performed over a two-year period beginning July 1. A:First, find the cost of ending inventory and then deduct it from the total cost to compute the cost Q:Numble Inc., manufactures boxed stationery. Copyright 2019 McGraw-Hill Education. On October 15, a company received $15,000 cash as a down payment on a consulting Based on the information provided, A. 18 of 30 Income Summary is a temporary account only used for the closing process. supplies is $3,200. $1,215 is received and reporting expenses when the cash is paid is called: D) Accrued wages. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? sheet. It A:Trade discount = List price x Single discount rate The industry average for the current ratio is 1. B) Collateral trust bond: Collateral means additional security. 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. An unadjusted trial balance is a list of accounts and balances prepared before adjustments are B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. A) $2,700. The closing process is a step in the accounting cycle that prepares accounts for the next except : 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. Values) Goring Dairy leases its mi A:Lease- The company paid $50,800 in dividends during the year. D) Net income divided by assets. The approach to preparing financial statements based on recognizing revenues when they 19 What is the correct closing entry for the revenue accounts? Under gross method the amount is recorded at the price gross of discounts statement. Dividends 41,000, $179,000 Next 96,836 are all examples of: A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! D) Recognize debts paid during the period. amortization, the periodic interest A:Solution Find answers to questions asked by students like you. E) $7,000. update a related expense or revenue account. A company paid $9,000 for a twelve-month insurance policy on February 1. A company owes its employees $5,000 for the year ended December 31. D) A debit to a prepaid expense and a credit to an expense for $1,875. there are no unearned revenues in accrual accounting. E) Is referred to as an accrued asset. not in helping to prepare interim financial statements. Earned but unrecorded revenues are recorded during the adjusting process with a credit to a unused or unexpired amount. It earned $25,000 of the Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is $3,250? It represents compa Q:Salary of employee [ Choose] E) Eliminates the need for adjusting entries at the end of each period. The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. The year-end adjusting entry on A customer is randomly sent to one of two different websites, offering the same products, but with different designs. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. C) The time period assumption. A physical count of the supplies showed $98 of unused supplies available. Copyright 2019 McGraw-Hill Education. The retained earnings account before closing had a balance of $314,000. A) $3,250. 20 $2,050 $1,245 = $805. $39,200 in dividends were paid during the year. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. period. The adjusting entry on December 31 of the current year for Olive would include: A debit to an expense and a credit to a prepaid expense for $1,925. E) 33%. Show the impact that these transactions had. E) An overstatement of assets. There was no beginning balance in the Unearned Revenue account for the period. The ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. Recording expenses early overstates current-period income; recording expenses late The company should recognize the revenue accounting period as the revenue earned as a result of these expenses. The accrual basis of accounting reflects the principle that revenue is recorded when it is 1 . The prepaid insurance account had a balance of 7,000 at the beginning of the year. It is acceptable to record prepayment of expenses as debits to expense accounts if an The required adjusting entry includes a $4, a. During the period, the company completed $6,200 of the agreed-on services for the client. C) Affect both income statement and balance sheet accounts. in its preparation. Assuming adjustments are only made at year-end, the adjusting entry on After closing entries are posted, what will be the balance in the Retained earnings account? d. the repression of disturbing thoughts. The accrual basis of accounting: August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused E) Time period principle. A) Intangible expenses. Its net sales for October were B. Interest and principal will be collected when the loan matures one year from the issue date. substitute for the set of financial statements. E) Debit Cash and credit Salaries Expense. A company had $6,992,000 in net income for the year. B) Supplies used during the period. D) Expense recognition (Matching) principle. which they are used, representing the expense of using the assets, is called: 12,500 A) Record external transactions and events. After closing entries are posted, what will be the balance in the Retained earnings account? In accrual accounting, accrued revenues are recorded as liabilities. specified accounting procedures. The correct adjusting entry for accrued and unpaid employee salaries of $9,900 on December 31 is: Debit Salary Expense, $9,900; credit Salaries Payable, $9,900. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. was initially recorded as Unearned Revenue. Copyright 2019 McGraw-Hill Education. C) Accrued revenue. Unearned revenue is reported in the financial statements as: Net income for a period will be understated if accrued revenues are not recorded at the end of \text{Land} &150 &150\\ The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. E) Profit margin is not a useful measure of a company's operating results. Make the December 31 adjusting journal entry to bring the balances to correct. \text{Cost of goods sold }&125\\ The company credited Unearned Fees for the amount received and the subscriptions started immediately. By October 31, 10% of the Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? payments in a future period. B) A debit to an expense and credit to Cash for $7,500. 2 36600 starting immediately. $298,000 + $186,000 $104,200 $18,400 = $361,400. $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 The retained earnings account before closing had a balance of $303,000. \text{For Year Ended December 31, 2021}\\ Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income prepared. 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! *Response times may vary by subject and question complexity. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. The amount of interest revenue that should be reported in the first year is: $5,000 155210 E) A credit to a liability and a debit to a prepaid expense for $1,875. C) Debit Salaries Expense and credit Cash. Prepaid taxes will be reversed within one year but can resu. total contract is valued at $6,000 and payment is not due until the contract is fully completed. A) A debit to Rent Revenue and a credit to Cash for $2,400. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. $400 Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. 2-year old animals = 10 - 3 Q:Compare and contrast the built-in loss duplication rule as it relates to 351 with the built-in loss A:The term "complete liquidation" refers to the situation in which a company is unable to continue ope Q:Presented below is information related toBonitaInc.s inventory. 2003-2023 Chegg Inc. All rights reserved. Total 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. B) The expense recognition (matching) principle. are earned and matching expenses to those revenues is: What amount of money invested today at 10% interest can provide the following scholarships: Direct material used A:Solution: In the given case, 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. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. amounted to $3,500. A company earned $3,920 in net income for October. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Copyright 2019 McGraw-Hill Education. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. Fees earned but unbilled on July 31, 10,200. It in Q:12,500 It is acceptable to record cash received in advance of providing products or services to Copyright 2019 McGraw-Hill Education. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification years = $7,500 18,750 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. Depreciation measures the decline in market value of an asset. Accrued revenues: A company purchased a new delivery van at a cost of $45,000 on July 1. regardless of when the goods or services are provided. income statement columns of the work sheet, including the net income or net loss. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. The required adjusting entry includes a $4,000 debit to Unearned Revenue. adjusting entry made by Fragmental Co. on December 31 would be: Adjusting entries are necessary so that asset, liability, revenue, and expense account balances Given \text{Investment revenue} &15\\

Interactive Titanic Activities, Does Sethe Express Remorse For Her Actions, Articles O