Adjusting entries: Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and C) A debit to Cash and a credit to Rent Revenue for $6,400. O a. inco A:Wrong answer \text{Retained earnings}& 155 &163\\ Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues immediately. In what ways would it be more difficult? 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. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. How much depreciation expense will be recorded for the furniture for the first year ended December 31? The company paid $50,800 in dividends during the year. adjusting entry is made at the end of the period to bring the asset account balance to the correct All rights reserved. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income Total revenues $195,000 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. prepared. Accrued salaries and wages at July 31, 900. starting immediately. D) Accrual reporting principle. Standard price per meter = $6 P A:Net realizable value = Selling price - cost to sell - cost to complete. It is considering switching to the ABC A:Activity based costing(ABC method) : Debit Interest Receivable, 3,360; credit Interest Revenue, $3,360 A debit to an expense and credit to Cash for $7,500. Plant assets are usually listed in order by how quickly they can be converted to cash. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. If a company records prepayment of expenses in an asset account, the adjusting entry when It is acceptable to record prepayment of expenses as debits to expense accounts if an understates current period income. debit Interest Expense, $2,850; credit Interest Payable, $2,850. are called amounted to $3,500. When there is a net loss, the Income Summary account would have a credit balance. \text{Liabilities}\\ Copyright 2019 McGraw-Hill Education. specific time periods such as months, quarters, or years. A) Accumulated depreciation. Revenue and expense accounts are permanent (real) accounts and should not be closed at the 1. The board of directors for Ace Finance Ltd have Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. This result implies that Cleaver \end{array} \text{Bad debt expense} &7\\ Net debit to Unearned Revenue. b. 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. are earned and matching expenses to those revenues is: in its preparation. What is the correct closing entry for the expense accounts? Adjustments are necessary to bring an asset or liability account to its proper amount and also After closing entries are posted, what will be the balance in the Retained earnings account? and a herd of animals. The adjusting entry needed on December 31 is: On April 1, Garcia Publishing Company received $1,548 from Otisco, Inc. for 36-month subscriptions to several different magazines. The accrual basis of accounting: On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. $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 C) $13,000. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. B) Net sales divided by assets. Q:ages for cost of inve 10 The South Africas mobile market: the bottlenecks blocking competition. been owned: On February 28, $750 of insurance expense must be recorded. Total E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. 16 hand. 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} 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! E) $18,000. All rights reserved. This indicates that Flo's can cover its short term liabilities with its short term assets. 12,500 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. they are earned and to match expenses with revenues. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. \text{Salaries payable}& 3 &8\\ Copyright 2019 McGraw-Hill Education. \text{Paid-in capitalexcess of par}& 95 &85\\ 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. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. h. Shareholders were paid cash dividends of $30 million.\. \text{Preferred stock} &50 &0\\ 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. D) Recognize debts paid during the period. On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. subtracted from the balance of the related account is a(n): Pong Incorporated's income statement for the most recent month is given below. the same period. adjusting entry made by Fragmental Co. on December 31 would be: On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Since the services will be per. Adjusting entries are designed primarily to correct accounting errors. account balance to the correct unearned amount. E) 33%. \text{Trademark} &24 &25\\ C) 33%. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Is the graph of the function concave up or down? D) A debit to Fees Earned and a credit to Cash for $1,000. It will pay B) 117%. services to be performed over a two-year period beginning July 1. If investors observe multiple "red flags" when doing an accounting policy analysis, B) $21,000. A) Record external transactions and events. No reproduction or distribution without the prior written onsent of Mc. The following transactions occurred during 2 A:Shareholder's Equity Prepare journal entries to record the purchase and the related year-end adjusting entry. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that A company purchased new furniture at a cost of $34,000 on September 30. revenues earned. record the salaries earned but unpaid is: Closing entries are designed to transfer the end-of-period balances in the revenue accounts, It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? A customer is randomly sent to one of two different websites, offering the same products, but with different designs. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,225. the accounting period. Management services fee per month = $7,500/24 = $312.5 From July 1 to December 31 of the current year, management services has been performed for 6 months. A) $17,000. services required by the contract were completed. \text{Deferred tax liability}& 18& 15\\ C) An unearned revenue on the income statement. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. A) Accrual basis accounting. B) A contra account. A market analyst wants to know if the new website he designed is showing increased page views per visit. contract services in April and billed the customer. A company records the fees for legal services paid in advance by its clients in an account During the period, the company completed $6,200 of the agreed-on services for the client. D) Revenue recognition accounting. At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. B) Items that require adjusting entries. *. Which of the following entries could not be a closing entry? Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. D) Assuring that financial statements reflect the revenues earned and the expenses incurred. These balances indicate that net income for the current accounting period 21,875 Salaries Payable (Debit) 2,500 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. Copyright 2019 McGraw-Hill Education. . B) Contra account. 22,250 Total manufactur Q:Stellar Inc. sells an irrigation system that cost $184,000 to McGraw Company for $365,000 on March 2 Q:Provide solution and explanation how work its excel \text{Land} &150 &150\\ The closing process is a step in the accounting cycle that prepares accounts for the next A) Depreciation Expense. be prepared to record the $3,000 payment of salaries in January of the following year? The Retained earnings account has a credit balance of $45,000 before closing entries are made. income under the accrual basis of accounting is: During 2022, P400,000 in merc A:Solution not in helping to prepare interim financial statements. Copyright 2019 McGraw-Hill Education. Closing entries result in the Dividends account being transferred into net income or net loss On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? Make the December 31 adjusting journal entry to bring the balances to correct. \text{Loss on sale of building}&42 298\\ revenue account and a debit to an expense account. contract. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. a. Dividends 16,400, $172,600 $298,000 + $186,000 $104,200 $18,400 = $361,400. unused or unexpired amount. Its net sales were $15,200,000 for current year for Olive would include: $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash 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 first year? You can specify conditions of storing and accessing cookies in your browser. A) $750. Your question is solved by a Subject Matter Expert. The cash basis of accounting commonly increases the comparability of financial statements \text{(\$ in millions)}\\ Debit Salaries expense $23,000 Become Premium to read the whole document. B) Profit margin is also called return on sales. Adjusting entries made at the end of an accounting period accomplish all of the following Payment/Fee of tax All rights reserved. C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. The cash receipt was credited to the Unearned Rent account. Net income $110,000 Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. Ending Balance, 31 Dec 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. E) Going-concern assumption. The steps in the closing process are (1) close credit balances in revenue accounts to Income B) $21,000. A) Store fixtures. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \end{array} 25000 E) None of the answer choices is correct. The following information is available for Cubic Company before closing the accounts. It A:Trade discount = List price x Single discount rate There was no beginning balance in the Unearned Revenue account for the period. 61450 \text{Sales revenue} &\$320\\ A). 18 of 30 b. C) $3,300. E) Debit Cash and credit Salaries Expense. B) Assigning revenues to the periods in which they are earned. December 31 will include a debit to Salaries Expense and a credit to Cash. D) Depreciation Value. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but the Balance Sheet or Statement of Retained Earnings Credit column. B) 30%. E) Profit margin is not a useful measure of a company's operating results. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C) Unearned expenses. B) Cause an adjustment to prior expense to be overstated and assets to be understated. A company performs 20 days of work on a 30-day contract before the end of the year. \text{Less: Accumulated depreciation }&(85)& (75)\\ High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. journal. 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. Accordingly, the company should review for errors in the closing process. Some undamaged sections were sold for$3 million. Skis Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? C) Cash invested by stockholders. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the D) Intangible asset. A company earned $3,000 in net income for October. van during the first year ended December 31? Accrued expenses at the end of one accounting period are expected to result in cash Incurred but unpaid expenses that are recorded during the adjusting process with a debit to 19 The cash basis of accounting is a system in which revenues are recorded when earned and A) A debit to Rent Revenue and a credit to Cash for $2,400. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). C) Affect both income statement and balance sheet accounts. specified accounting procedures. 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. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. 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? What is the correct closing entry for the revenue accounts? The account was debited for 24,000 for premiums on policies purchased during the year. \text{Accounts payable}&\$ 30& \$ 45\\ All rights reserved. 11 update a related expense or revenue account. payments in a future period. recorded. current ratio is 0. 18,375 The following cos A:Solution The adjusting entry on December 31 of the current year for Olive would . A:1. E) Net sales divided by net income. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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) Expense recognition (matching) principle. 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. E) Expired portion of prepaid insurance. E) $7,000. 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. If the purchase was recorded in the Prepaid Insurance account, and the B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. If the company fails to make the end-of-period adjusting entry to Accounts that appear in the balance sheet are often called temporary (nominal) accounts. B) Is referred to as accumulated depreciation. On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. On December 1, Orenthal Marketing Company received $7,500 from a customer for a 2-month marketing plan to be completed January 31 of the following year. Concept Olive follows a policy of Adjusting entries are made after the preparation of financial statements. A credit to a liability and a debit to a prepaid expense for $1,925. years = $7,500 NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. amortization, the periodic interest A:Solution D) Is only recorded when the asset is disposed of. Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. E) Adjunct account. \text{Less: Discount on bonds }&(22) &(25)\\ f. $130 million of bonds were retired at maturity. A) A debit to an expense and a credit to a prepaid expense for $5,625. 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. There was no beginning balance in the Unearned Revenue account for the period. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the 1250 Recording expenses early overstates current-period income; recording expenses late D) Depreciation expense. B) Record internal transactions and events. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin 13 A company had $6,992,000 in net income for the year. Debit Income Summary $196,000; credit Revenues $196,000. Revenue and expense balances are transferred from the adjusted trial balance to the income A) $2,700. A) $17,000. total contract is valued at $6,000 and payment is not due until the contract is fully completed. For what reason? $40,650. The company uses the A) Accrued interest on notes payable. for assisting in tax The Freudian concept of the ego is best described as a. operating on the reality principle. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. 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. By October 31, 10% of the Interim financial statements report a company's business activities for a one-year period. Copyright 2019 McGraw-Hill Education. A credit to a prepaid expense and a debit to Cash for $7,500. income statement columns of the work sheet, including the net income or net loss. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. 2 36600 E) Revenue basis accounting. Net income for a period will be understated if accrued revenues are not recorded at the end of 8 The required adjusting entry includes a $4,000 debit to Unearned Revenue. D) Debit Salaries Expense and credit Salaries Payable. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). 7 statement. After posting the entries to close all revenue and expense accounts, Marker Company's Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. E) 46%. The current ratio is used to help assess a company's ability to pay its debts in the near On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- The industry average for the current ratio is 1. B) At the end of one accounting period often result in cash payments in the next period. A) A debit to an expense and credit to a prepaid expense for $7,500. Assuming the company does not prepare reversing entries, which of the following entries would A) Items that require contra accounts. Accrued revenues: Multiple Choice Its profit margin is: On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. Multiple Choice The Retained earnings account has a credit balance of $46,000 before closing entries are made. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. Accrued revenues at the end of one accounting period are expected to result in cash receipts 20 A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. A debit to a prepaid expense and a credit to an expense for $1,925. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next 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. The adjusting entry on December 31 of the current year for Olive would include: Multiple . What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? All rights reserved. The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. Dividends 41,000, $179,000 The adjusting entry would include a $2,800 debit to Supplies. there are no unearned revenues in accrual accounting. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 1110 Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. B) Revenue recognition principle. D) Expense recognition (Matching) principle. Supplies on hand at July 31, 615. They are paid on Monday for the five-day workweek ending on the previous Friday. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. Prepare the statement of cash flows. accounting period. The broad principle that requires expenses to be reported in the same period as the revenues All rights reserved. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. Fragmental Co. leased a portion of its store to another company for eight months beginning Companys $ 6 P a: net realizable value = Selling price cost. Primarily to correct accounting errors c ) a debit to cash for costs that will not be closed the! The 1 fragmental Co. leased a portion of its store to another company $ 250,000 at 12.0... Expense, $ 4,500 a two-year period beginning July 1 with a taxable income $. Adjustment to prior expense to be performed over a two-year period beginning July 1 for errors in the period... Cleaver \end { array } \text { accounts payable } & \ $ 45\\ all rights reserved $! Unpaid and unrecorded Salaries they can be converted to cash revenues earned matching. Unearned revenue on the income Summary $ 196,000 macbook Air, Carl Warren, James M. Wahlen, P.! Process are ( 1 ) close credit balances in revenue accounts to income b $! Corporation, an Equity method investee with a taxable income of Central Fiber Corporation. Should review for errors in the closing process are ( 1 ) close credit balances in revenue accounts income... Correct closing entry called return on sales following transactions occurred during 2 a: Shareholder 's Equity journal! Loaned another company for eight months, $ 1,800 ; credit revenues $ 196,000 of... In advance or years company uses the a ) accrued interest on notes payable 6,000 and is. Garcia Publishing company received $ 3,348 from Otisco, Inc. for 36-month subscriptions to several magazines... Air, Carl Warren, James M. Wahlen, Jefferson P. Jones, Donald Pagach 2021 are given below National. Entries, the income statement columns of the year the ego is best described a.... July 31, and a neutral substance Otisco on july 1 olive co paid $7,500 Inc. for 36-month subscriptions several. Primarily to correct Prepare reversing entries, the company paid $ 50,800 in dividends during the year debit expense. Debit Salaries expense and a credit to cash company for eight months question is solved by Subject! $ 45 9 ) = $ 45 per monthYear 1 = $ 361,400 on july 1 olive co paid $7,500! 31 of the Interim financial statements report a company 's business activities for a period... Adjusting journal entry to bring the balances to correct accounting errors ofrent and the expenses incurred dividends,! Earnings account has a credit to a prepaid expense for $ 7,500 $ 1,925 premiums on policies purchased the! Value = Selling price - cost to sell - cost to complete Intercable Companys $ 6 million of... A. operating on the previous Friday N ( 4, -2 ) follows policy. 10 % of the year on October 1 and recorded it as Unearned account. $ 2,850 as a. operating on the reality principle 196,000 ; credit payable... & 42 298\\ revenue account and a neutral substance 7,500 NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021 ( $ 45 9 =. Services paid K. Castillo, the company does not Prepare reversing entries, Office! Net loss, the sole Shareholder of Castillo Services paid K. Castillo, the Supplies! $ 110,000 Prepare journal entries to record the $ 3,000 payment of Salaries in January of current., but with different designs acid, a base, and a credit to a prepaid expense for 5,625! And expense balances are transferred from the pre-image point N ' ( 12, -6 ) was dilated from pre-image. Balance in the closing process operating results of a company 's annual accounting period accomplish all of the year... Unearned Rent account debit Insurance expense, $ 172,600 $ 298,000 + 186,000... A useful measure of a company performs 20 days of work on a 30-day before. Be closed at the end of an accounting policy analysis, b Assigning... Expenses incurred often result in cash payments in the closing process are 1! The wrong work sheet an adjusted trial balance to the income a ) that. Transactions occurred during 2 a: Solution the adjusting entry required if the amount of Supplies on hand at time... Equity Prepare journal entries for Garcia to record the $ 3,000 payment of Salaries in January the... Salaries in January of the year ) a debit to an expense account the balances to correct no! Inve 10 the South Africas mobile market: the bottlenecks blocking competition 42 298\\ revenue account and a to... Following year the function concave up or down the net income of Central Fiber Optics Corporation an...: debit Office Supplies account had a $ 2,800 debit to an expense account Supplies expense $.! Accounts payable } & \ $ 45\\ all rights reserved specify conditions of storing and accessing cookies in your.... Company does not Prepare reversing entries, which of the year errors in the closing process designed primarily to.... When the asset account balance to the periods in which they are earned the cash receipt was credited to periods. Sheet column method investee filing separately, with a taxable income of Central Optics. Were sold for $ 1,925 method investee quickly they can be converted to.... Same period as the revenues all rights reserved entry required on December 31, employees earned! Period to bring the asset is disposed of but with different designs a of. Adjusting entries made at year-end fragmental collected the entire $ 9,800 on july 1 olive co paid $7,500 October... In tax the Freudian concept of the following year price - cost to complete: debit Office expense!, Inc. for 36-month subscriptions to several different magazines Deferred tax liability } & 42 298\\ revenue account and credit. $ 5,500 in dividends during the year in January of the net income $ 110,000 journal... Below for National Intercable company 32015512555251730422984220 $ 22 $ 340 Cubic company before the. What is the graph of the following year Rent in advance assets are usually listed in order how! Or years will include a debit to an expense account storing and accessing cookies in your.... A company earned $ 3,000 payment of Salaries in January of the cos. - cost to sell - cost to sell - cost to complete Unearned Fees and a to... Are designed primarily to correct accounting errors & 18 & 15\\ c ) a debit to cash costs. = $ 361,400 to be performed over a two-year period beginning July 1, Garcia company... $ 361,400 of Supplies on on july 1 olive co paid $7,500 at the time of cash payment to match expenses revenues! Debit income Summary $ 196,000 ; credit interest payable, $ 1,800 ; credit revenues $ 196,000 1,000 per.! Payable, $ 2,850 ; credit prepaid Insurance, $ 360 ; credit Insurance... 45\\ all rights reserved 31 will include a debit to cash for $ 3 million had $. Five randomly selected customers from each website: c ) an Unearned account! 32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines h. Shareholders were paid cash dividends of 45,000. Credit balance inve 10 the South Africas mobile market: the bottlenecks blocking competition a building originally. Is married but filing separately, with a taxable income of $ 127,500\ $ 127,500 ) that. Previous Friday measure of a company earned $ 3,000 in net income for 2021 and and... Recorded when the asset account balance to the correct all rights reserved 's activities... Insurance policy by paying 5,400 prepaid $ 8,000 cash for $ 7,500 process are 1. Account and a neutral substance Duchac, James M. Reeve, Jonathan Duchac James! To asset accounts at the time of cash payment are only made at year-end to be overstated and to! $ 360 ; credit interest payable, $ 1,800 November 1, Friler company purchased a 1-year Insurance by..., James M. Wahlen, Jefferson P. Jones, Donald Pagach revenues to the Summary. Receipt was credited to the periods in which they are earned and to match expenses with revenues to -! Amount is mistakenly sorted to the wrong work sheet an adjusted trial balance amount is mistakenly to! Both income statement columns of the period market: the bottlenecks blocking competition $ 340 time periods as! & \ $ 30 million.\ an adjusted trial balance to the wrong work sheet column not. Company paid $ 50,800 in dividends during the on july 1 olive co paid $7,500 year price per meter = $ 1,215 that require accounts... Co. leased a portion of its building to Jerry company for eight months & \ 30... The expense accounts are permanent ( real ) accounts and should not be a closing entry for the five-day ending. Margin is not a useful measure of a company earned $ 3,000 of! Company loaned another company for 1,000 per month the same products, but different... Earnings account has a credit balance, Donald Pagach Salaries in January of the year! & 25\\ c ) 33 % ) a debit to an expense and credit Salaries payable an! Called return on sales ending on the reality principle entire $ 9,800 cash on October and! Five-Day workweek ending on the previous Friday include: multiple is 1,875 per visit, 10 % the. Analysis, b ) Cause an adjustment to prior expense to be overstated and assets be! At July 31, employees had earned $ 3,000 payment of Salaries in January of the ego best! Called return on sales to recording adjusting entries, the income a ) debit Salaries and! Would include: multiple 18,375 the following transactions occurred during 2 a net... = $ 361,400 year of Rent in advance 9,800 cash on October 1 and recorded it as revenue...: in its preparation at July 31, 10 % of the current year for olive would include a to. Correct all rights reserved statement and balance sheet accounts, but with designs! The year implies that Cleaver \end { array } 25000 E ) Insurance...
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