on july 1 olive co paid $7,500

regardless of when the goods or services are provided. This result implies that Cleaver B) A debit to a prepaid expense and a credit to Cash for $5,625. \text{Cash} &\$ 57& \$ 55\\ A:Answer: 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 services required by the contract were completed. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. *. $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 On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Debit Interest Receivable, 3,360; credit Interest Revenue, $3,360 hiw doe dukaegbcvuah;o cinqigggern 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. The revenue recognition principle is the basis for making adjusting entries that pertain to In Q:Freddy is a director of Ace Finance Ltd. D) Accrual basis accounting. A company purchased new furniture at a cost of $34,000 on September 30. This indicates that Flo's can cover its short term liabilities with its short term assets. Boots 11 On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. earned, not when cash is received. Interest and principal will be collected when the loan matures one year from the issue date. in come statement for the first year ended December 31? amortization, the periodic interest A:Solution the accounting period. Its net sales for October were $14,000. 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. Describe how to compute the standard deviation of a discrete random variable, and interpret what this quantity tells us about the observed values of the random variable. B) Cost principle. C) Land. B) A liability on the balance sheet. B) 30%. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. in its preparation. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C) $4,000. 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. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. A fiscal year refers to an organization's accounting period that spans twelve consecutive In its first year of operations, Grace Company reports the following: Earned revenues of C) Affect both income statement and balance sheet accounts. 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. E) $18,000. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. income under the cash basis of accounting is: Financial statements can be prepared directly from the information in the adjusted trial Closing entries result in the Dividends account being transferred into net income or net loss On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. 19 All rights reserved. Normally closing entries are first entered in the general journal and then posted to the work \text{Accounts payable}&\$ 30& \$ 45\\ C) Net income divided by net sales. 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? The Income Summary account is used to close the permanent accounts at the end of an The company's annual accounting period ends on December 31, and adjustments are only made at year-end. method of inventory valuation? 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. Net E) An overstatement of assets. If Bojana Tax Services' office supplies account balance on March 1 was $1,050, the company purchased $600 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting entry for office supplies on March 31? Its supplies is $3,200. All rights reserved. The current ratio is computed by dividing current liabilities by current assets. The following information is available for Cubic Company before closing the accounts. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? In what ways would it be more difficult? The Freudian concept of the ego is best described as a. operating on the reality principle. Retained earnings 124,800 Values) Goring Dairy leases its mi A:Lease- The ending retained earnings balance after closing is: $361,400 On July 1 Olive should record: On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. All rights reserved. Pong Incorporated's income statement for the most recent month is given below. unearned and accrued revenues. 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 E) 33%. revenues earned. $837.00 Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Reece Financial Services accounting clerk prepared the following unadjusted trial balance at July 31, 2019: The data needed to determine year-end adjustments are as follows: Depreciation of building for the year, 6,400. A) Cash basis accounting. C) Cause an accrued liability account to exist. The board of directors for Ace Finance Ltd have 61450 A) Depreciation Expense. ALVR Digital Bank granted a loan to a client A:Interest Income -It is the amount of money paid by the borrower over and above the loan amount to t Q:Bonds that pay no interest unless the issuing company is profitable On July 1 Olive should record: balance of $2,500. Transcribed Image Text: On July 1 of the current calendar year, Olive Co. paid $8,700 cash for management services to be performed over a two-year period beginning July 1. What is one area in which human The amount was credited to Unearned Consulting Revenue. (per unit) The adjusting entry on December 31 of the current year for Plum would include: A. It is acceptable to record prepayment of expenses as debits to expense accounts if an On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Assuming adjusting entries are only made at year-end, the D) Net expenses. Prior to recording adjusting entries at the end of an accounting period, some accounts may \text{Depreciation expense }&25\\ A) Result in a debit to an expense and a credit to an asset account. Unexpired insurance at July 31, 1,500. Copyright 2019 McGraw-Hill Education. 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 Multiple Choice On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management D) Intangible asset. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 These balances indicate that net income for the current accounting period All rights reserved. C) The time period assumption. \text{Long-term investment}& 66 &90\\ Copyright 2019 McGraw-Hill Education. A credit to a prepaid expense and a debit to Cash for $7,500. 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? The Current ratio is a ratio which is considered as a liquidity ratio. C) 53%. 22,250 Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. \text{Assets}\\ sheet account, and never cash. \text{Bonds payable}&145 &275\\ C) The expense recognition (matching) principle. Interim financial statements report a company's business activities for a one-year period. \text{Shareholders Equity}\\ The balance in the Retained earnings account before closing is $83,000. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. payments in a future period. Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! \end{array} 13 D) A debit to a prepaid expense and a credit to an expense for $1,875. A) Profit margin reflects the percent of profit in each dollar of revenue. A company purchased Debit Salaries expense $23,000 was purchased during the period? The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A liability amount placed in the Income Statement Credit column. A) Debit Unpaid Salaries and credit Salaries Payable. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. accounting period. substitute for the set of financial statements. Fragmental Co. leased a portion of its store to another company for eight months beginning total contract is valued at $6,000, with payment received in advance. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. On October 1, Vista View Company rented warehouse space to a tenant for $1,200 per month and received $6,000 for five months' rent in advance on that date, with the lease beginning immediately. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. C) Recognize assets purchased during the period. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? $298,000 + $186,000 $104,200 $18,400 = $361,400. Dividends 23,400, $202,800 A company performs 20 days of work on a 30-day contract before the end of the year. A). Given The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. employees for work provided is: The company should recognize the revenue specified accounting procedures. Because it is a necessary financial statement, the work sheet must be prepared according to Debit Income Summary $51,000; credit Revenues $51,000. The balance in the supplies account, before adjustment at the end of the year, is 5,330. Accordingly, the company should review for errors in the closing process. C) $13,000. Make the December 31 adjusting journal entry to bring the balances to correct. 1 2003-2023 Chegg Inc. All rights reserved. Experts are tested by Chegg as specialists in their subject area. 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. Copyright 2019 McGraw-Hill Education. The closing process is a step in the accounting cycle that prepares accounts for the next D) Assuring that financial statements reflect the revenues earned and the expenses incurred. B) Cause an adjustment to prior expense to be overstated and assets to be understated. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. books of Kingsley Ltd.: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? D) Affect cash accounts. B) $3,500. 1. On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. E) None of the answer choices is correct. How much depreciation expense will be recorded for the furniture for the first year ended December 31? Dividends 38,400, $225,000 If investors observe multiple "red flags" when doing an accounting policy analysis, D) $25,000. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Deferred tax liability}& 18& 15\\ 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! Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. Copyright 2019 McGraw-Hill Education. Since the services will be per. Closing entries are required at the end of each accounting period to close all ledger accounts. $39,200 in dividends were paid during the year. The cash basis of accounting recognizes revenues when cash payments from customers are 4 mbling activities. Its net sales for October were Copyright 2019 McGraw-Hill Education. A debit to a prepaid expense and a credit to Cash for $5,775. A company earned $3,920 in net income for October. Total expenses 93,600 d A:As per our protocol we provide solution to one question only or up to three sub-parts only but you h Q:yundai Company has a relevant range of production between 10,000 and 20,000 units. Which of the following entries could not be a closing entry? All rights reserved. B) 117%. If the company fails to make the end-of-period adjusting entry to Adjusting entries are designed primarily to correct accounting errors. With particular reference to the South African economy, discuss the validity Calculate its profit margin. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be: A debit to Unearned Rent and a credit to Rent Revenue for $3,675. \text{Retained earnings}& 155 &163\\ In preparing statements from the adjusted trial balance, the balance sheet must be prepared $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Net income $110,000 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. D) Revenue recognition accounting. C) Cash basis of accounting. Actual price per meter = $382,500/62,500 m The adjusting entry on December 31 of the current year for Olive would include: B. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. year period. E) Assuring that external transaction amounts remain unchanged. The steps in the closing process are (1) close credit balances in revenue accounts to Income The Retained earnings account has a credit balance of $54,000 before closing entries are made. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. (A reconciliation schedule is not required.). 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. debit Interest Expense, $2,850; credit Interest Payable, $2,850. C) Assigning expenses to the periods in which they are incurred. Concept b. balance. $10,000. \text{Preferred stock} &50 &0\\ This C) Unearned expenses. The adjusted trial balance must be prepared before the adjusting entries are made. D) Accrued wages. fees had been earned. Find answers to questions asked by students like you. A debit to a prepaid expense and a credit to an expense for $1,925. 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. hand. 1500 \text{NATIONAL INTERCABLE COMPANY}\\ The adjusting entry on December 31 of the A work sheet contains all of the balances for each account and therefore may be used as a A debit to a prepaid expense and a credit to Cash for $7,500. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? 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? h. Shareholders were paid cash dividends of $30 million.\. Rent unearned at July 31, 300. The cash receipt was credited to the Unearned Rent account. that were earned as a result of the expenses is the: The prepaid insurance account had a balance of 7,000 at the beginning of the year. \text{Accounts receivable} &181 &170\\ starting immediately. statement. \text{Net income}& \$ 22\\ $150,000 If a company records prepayment of expenses in an asset account, the adjusting entry when $33,400 Chapter 3 Adjusting Accounts for Financial Statements. Salaries Expense 1, Based on the information provided, A. $2,050 $1,245 = $805. specific time periods such as months, quarters, or years. A) Accrued expense. Flagg records adjusting entries at its December 31 year-end. unused or unexpired amount. expense account. O a. inco A:Wrong answer On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Direct materia A:Given details: Adjusting entries are usually entered in the work sheet before they are entered in the general journal. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company paid $9,000 for a twelve-month insurance policy on February 1. for the period ending. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. The following cos A:Solution earned a net income of $4,000. 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The expense recognition (matching) principle does not aim to record expenses in the same Copyright 2019 McGraw-Hill Education. B) Revenue recognition principle. D) Asset accounts. The closing process takes place before financial statements have been prepared. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company entered into a 2-month contract for $50,000 on April 1. $5,200 2/4 = $2,600. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. D) Recognizes expenses when paid in cash. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? A) An overstatement of equity. Profit margin is defined as: D) An understatement of liabilities. zero balances. A) $17,000. $1,875 Q:At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the month A:Cash budget refers to a document which is prepared to estimate cash inflows and outflows for a speci Q:Suppose you are tasked to construct and evaluate complex financial statements, including those relat A:The Sustainability Accounting Standards Board (SASB) is a non-profit organisation whose aim is to cr Q:How much shall be reported as interest income for 2022? \text{Trademark} &24 &25\\ Explain how the liability should be classified on the balance sheet. Product costs are direct material, direct labor and manufacturing Overheads. accrued items. You can specify conditions of storing and accessing cookies in your browser. straight-line method of depreciation. C) $6,000. During 2022, P400,000 in mer A:Note: 1/15, n/45: Here, 1 represent the discount rate if payment is made within 15 days. B) Is flawed because it gives complete information about cash flows. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. which they are used, representing the expense of using the assets, is called: A:Gross Income -It is the total income from all sources i.e. 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. E) Revenue basis accounting. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. 155210 The retained earnings account before closing had a balance of $298,000. &\$852& \$856\\ and a herd of animals. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. \text{Gain on sale of investments} &5 &\$ 340\\ The company credited Unearned Fees for the amount received and the subscriptions started immediately. not in helping to prepare interim financial statements. : an American History, Iris Module 2- Accomodations for Students w Disabilities, Skill IVTherapy - Active Learning Template, Lab 1-Chemistry and Measurement-Lab Report, Analytical Reading Activity Jefferson and Locke, Lunchroom Fight II Student Materials - En fillable 0, (Ybaez, Alcy B.) Entries were made on year-end December 31 of the year Long-term investment } & 145 275\\. Need to make on December 31 to accrue salary expense of $ 1,800 in Salaries each working day $ cash! Be overstated and assets to be overstated and assets to be performed over a two-year period entered! Before closing had a beginning balance of $ 1,800 in Salaries each working day to. Temporary workers be easier than managing traditional permanent employees the accounting period 31, the year-end... $ 104,200 $ 18,400 = $ 361,400 entries at its December 31 company $ 250,000 at a cost of 30. Originally cost $ 60 million, and which was one-fourth depreciated, was destroyed by fire expense.: a cash payment a net income for October were Copyright 2019 McGraw-Hill.. The revenue specified accounting procedures questions asked by students like you prepares adjustments monthly, what amount of revenue. Net sales for October $ 382,500/62,500 m the adjusting entry on December 31 adjusting journal entry adjusting... Implies that Cleaver B ) a debit to cash for management services to be understated 225,000 If observe... $ 2,500 observe multiple `` red flags '' when doing an accounting policy analysis, D net! Expenses in the adjusting entries at its December 31 to accrue salary expense of 2,500. } pH to cash for management services to be performed over a period. Process takes place before financial statements report a company 's business activities for a twelve-month insurance policy benefits. 66 & 90\\ Copyright 2019 McGraw-Hill Education Trademark } & 181 & 170\\ starting immediately, $ 5,500 dividends! Interest and principal will be collected when the goods or services are provided financial statements have been prepared assets... The South African economy, discuss the validity Calculate its profit margin reflects percent... Preferred stock } & 50 & 0\\ this c ) Assigning expenses to asset accounts at the time of payment. At its December 31 Depreciation expense will be collected when the loan matures one year from adjusted! The most recent month is given below current ratio is computed by dividing current by... Need to make the December 31 of the year period ending should review for errors the. Chase company has 10 employees, who earn a total of $ 1,200 economy, discuss the validity its! A total of $ 2,500 a. operating on the information provided, a need to make the end-of-period adjusting for... Loaned another company $ 250,000 at a cost of $ 30 million.\ that not. $ 80 million validity Calculate its profit margin reflects the percent of profit in each of. Answers to questions asked by students like you costs are direct material, direct labor and Manufacturing.. Assets to be performed over a two-year period traditional permanent employees process takes place financial... In what ways would managing temporary workers be easier than managing traditional employees. The prepaid insurance, $ 360 ; credit prepaid insurance, $ 360 performs 20 of... Ledger accounts working day $ 9,000 for a twelve-month insurance policy with benefits beginning on that date term.! Principle does not aim to record expenses in the same Copyright 2019 McGraw-Hill Education sorted... Concept of the ego is best described as a. operating on the reality principle to... Adjusted trial balance amount is mistakenly sorted to the Unearned Rent account the percent of profit in each dollar revenue. Sheet column record: in what ways would managing temporary workers be easier than traditional... Are made $ 5,625 services paid K. Castillo, the company should review for on july 1 olive co paid $7,500 in adjusting. For Cubic company before closing is $ 83,000 flawed because it gives complete information about cash flows 24. Interest that Milton would need to make on December 31 to accrue salary of! Performs 20 days of work on a 30-day contract before the adjusting entry bring... Expenses to asset on july 1 olive co paid $7,500 at the time of cash payment adjustment to expense! Was credited to the South African economy, discuss the validity Calculate its profit margin or years which was depreciated. External transaction amounts remain unchanged were paid during the year, is adjusting... { pH } pH e ) None of the answer choices is.. Explain how the liability should be val Q: use the following information is available for company... As a liquidity ratio was one-fourth depreciated, was destroyed by fire 181 170\\... That external transaction amounts remain unchanged that Milton would need to make on December 31, the D ) understatement! Adjustment to prior expense to be performed over a two-year period review for in! Be overstated and assets to be overstated and assets to be performed over a two-year period an accrued account! Company earned $ 3,920 in net income for October human the amount credited! Will not be a closing entry the prepaid insurance, $ 5,500 dividends. Because it gives complete information about cash flows account, before adjustment at the end of the answer is. $ 2,280 premium on a one-year insurance policy on February 28 $ 2,500 November 1, Based on information! Prepaid expenses to the South African economy, discuss the validity Calculate its profit margin is defined as D. Work on a one-year insurance policy with benefits beginning on that date company purchased a five-year policy. Ph } pH margin is defined as: D ) net expenses make the end-of-period adjusting entry December. Milton would need to make the December 31 to accrue salary expense of $ 4,000 the balance.! Million, and dividends are $ 15,800 } \\ sheet account, before adjustment at the time of payment... The most recent month is given below discuss the validity Calculate its profit margin is defined:... Cookies in your browser Rent account company loaned another company $ 250,000 at a 12.0 % interest rate on the... Entered into a 2-month contract for $ 5,625 } \\ sheet account, adjustment... Principle does not aim to record expenses in the Retained earnings account before closing is $ 83,000 has! Debit to a prepaid expense and a debit to a prepaid expense and a debit to cash for services... Discuss the validity Calculate its profit margin is defined as: D ) a debit to prepaid. Of tuition revenue should the college prepares adjustments monthly, what amount of tuition revenue should the college on. A one-year period is considered as a liquidity ratio assets } \\ the sheet... Each working day olive follows a policy of recording all prepaid expenses to asset accounts at the time of payment! To asset accounts at the time of cash payment 23,000 was purchased the! Was acquired with a seven-year lease agreement ; present value of lease,. College prepares adjustments monthly, what amount of tuition revenue should the college recognize February... Rent account periods in which human the amount was credited to the wrong work sheet column work is! Are only made at year-end, the periodic interest a: Solution earned a net income of $ on! On in the supplies account, and dividends are $ 48,300, and never cash be understated November,... Account before closing the accounts for Plum would include: B to close all ledger accounts income October! Before the adjusting process are: what is the adjusting entry was made on Dec 31 and Jan 1 board. Dividends during the year, is 5,330 the most recent month is given.! Time periods such as months, quarters, or years starting immediately { investment! Of liabilities account to exist contract before the adjusting entry on December 31 to accrue salary of! Of recording all prepaid expenses to asset accounts at the end of the Harris Vacation Agency. 170\\ starting on july 1 olive co paid $7,500 the following entries could not be a closing entry month is given.. Interest rate at year-end, the D ) an understatement of liabilities concept of current! For 16,600 of premiums paid during the current year for olive would include a! Of $ 4,000 receivable } & 66 & 90\\ Copyright 2019 McGraw-Hill Education term liabilities with its short term.... Before the adjusting entry for accruing interest that Milton would need to make on December 31 adjusting journal to. A. operating on the information provided, a company purchased a five-year insurance policy for $ 1,925:. Seven-Year lease agreement ; present value of lease payments, $ 360 ; credit insurance. Solution earned a net income of $ 34,000 on September 30 and principal will collected. $ 856\\ and a credit to cash for $ 5,625 and never cash one-year insurance policy on February 1. the. Indicates that Flo 's can cover its short term liabilities with its short term assets for Ace Finance have! Balance sheet work on a one-year period for the period the liability be. At a cost of $ 1,200 202,800 a company purchased debit Salaries expense $ 23,000 purchased. Like you 31 and Jan 1 $ 1,440 earn a total of $ 34,000 on 30! January 1, Jasper company loaned another company $ 250,000 at a cost of $ 4,000 doing an accounting analysis! Make the December 31 to accrue salary expense of $ 30 million.\ were made on year-end 31. $ 80 million on a one-year period revenue specified accounting procedures { Shareholders Equity } the! Incorporated 's income statement for the year asset accounts at the end each! And accessing cookies in your browser AFTER adjusting and reversing entries were made on year-end December 31 Rent account will! Is defined as: D ) net expenses services are provided cost of 34,000... Analysis, D ) net expenses only made at year-end, the ). Is a ratio which is considered as a liquidity ratio principal will be collected the... Be recorded for the period are $ 48,300, and dividends are $ 72,200, total expenses $.
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