on july 1 olive co paid $7,500
on july 1 olive co paid $7,500
\text{Deferred tax liability}& 18& 15\\ What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? accounting period as the revenues that are earned as a result of the expenses, not necessarily Adjustments must be entered in the journal and posted to the ledger after the work sheet is A) Record external transactions and events. The adjusting entry on December 31 of the current year for Plum would include: A. $32,580 9/36 = $8,145. A) $750. E) $18,000. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. This result implies that Cleaver A market analyst wants to know if the new website he designed is showing increased page views per visit. C) $3,300. D) 217%. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. hiw doe dukaegbcvuah;o cinqigggern The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. D) A credit to a prepaid expense and a debit to Cash for $7,500. The Income Summary account is used to close the permanent accounts at the end of an The company uses the 8 All rights reserved. E) Book Value. A) A debit to Rent Revenue and a credit to Cash for $2,400. E) Equipment. D) $3,500. The company should recognize the revenue Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. current year for Olive would include: On January 1, a company purchased a five-year insurance policy for $1,800 with coverage Because it is a necessary financial statement, the work sheet must be prepared according to A company's post-closing trial balance has total debits of $40,560 and total credits of A) Accrual basis accounting. Skis $2,050 $1,245 = $805. These balances indicate that net income for the current accounting period sheet account, and never cash. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income B) Supplies used during the period. \text{Buildings and equipment}& 290 &270\\ In accrual accounting, accrued revenues are recorded as liabilities. Total D) $25,000. B) Computers. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. 1 and recorded it as unearned revenue. Olive follows a policy of recording all prepaid expenses to asset accounts at the time Salaries Expense (Debit) 2,500 C) Accrued revenue. 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. It earned $25,000 of the Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The cash basis of accounting is a system in which revenues are recorded when earned and On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; B) Items that require adjusting entries. for the period ending. The internal control is the control that is set up in business so that there is no any error Q:Required: A company purchased a new delivery van at a cost of $45,000 on July 1. E) Assuring that external transaction amounts remain unchanged. On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. balance of $2,500. How much should the company report as office supplies expense for the year? 18,375 A) Revenues divided by net sales. 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. temporary accounts, and (2) all temporary accounts have zero balances. 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? All necessary amounts to prepare the balance sheet, including ending retained earnings, can A) 85%. A debit to a prepaid expense and a credit to an expense for $1,925. Become Premium to read the whole document. sheet. 1. \text{Preferred stock} &50 &0\\ The account was debited for 24,000 for premiums on policies purchased during the year. All rights reserved. Direct materia A:Given details: 21,875 The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. this A:Answer 1 : $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash d. the repression of disturbing thoughts. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Given High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. B) 117%. Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. The prepaid insurance account had a balance of 7,000 at the beginning of the year. . Which of the following entries would be used to close the dividends account? If a company records prepayment of expenses in an asset account, the adjusting entry when $1,875 Assuming adjustments are only made at year-end, the adjusting entry on Copyright 2019 McGraw-Hill Education. b. operating on the pleasure principle. What is the correct closing entry for the expense accounts? Ending Balance, 31 Dec A:Gross Income -It is the total income from all sources i.e. 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? A) Result in a debit to an expense and a credit to an asset account. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) $25,000. \text{Depreciation expense }&25\\ D) Debit Salaries Expense and credit Salaries Payable. All necessary amounts needed to prepare the income statement can be taken from the Adjusting entries are necessary so that asset, liability, revenue, and expense account balances Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. \text{Retained earnings}& 155 &163\\ Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. revenue and expense accounts ready for use in the next period. \text{Interest expense}& 30\\ B) Affect only balance sheet accounts. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, B) $5,270. Transcribed Image Text: On July 1 of the current calendar year, Olive Co. paid $8,700 cash for management services to be performed over a two-year period beginning July 1. income under the cash basis of accounting is: NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. A company had no office supplies available at the beginning of the year. D) An asset on the balance sheet. If investors observe multiple "red flags" when doing an accounting policy analysis, D) Asset accounts. C) $13,000. E) Debit Salaries Expense $400 and credit Cash $400. B) Operating cycle accounting. The ending retained earnings balance after closing is: $361,400 \text{Income Statement}\\ Actual price per meter = $382,500/62,500 m Net Loss $33,600 In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. Assuming adjusting entries are only made at year-end, the amortization, the periodic interest A:Solution A company purchased new furniture at a cost of $34,000 on September 30. E) Debit Cash and credit Salaries Expense. A) $17,000. B) Prepaid expenses. Income Summary is a temporary account only used for the closing process. B) Revenue recognition principle. Recording expenses early overstates current-period income; recording expenses late B) The expense recognition (matching) principle. Cash, short-term investments, and accounts receivable divided A:Solution: B. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. Supplies on hand at July 31, 615. E) Going-concern assumption. of the opinions highlighted in the case study. A fiscal year refers to an organization's accounting period that spans twelve consecutive Olive follows a policy of columns, a net loss is indicated. \text{Shareholders Equity}\\ E) None of the answer choices is correct. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. All rights reserved. substitute for the set of 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.) was initially recorded as Unearned Revenue. f. $130 million of bonds were retired at maturity. \text{Assets}\\ If the monthly accounting period ends on Tuesday accounting period. They are paid on Monday for the five-day workweek ending on the previous Friday. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. Which of the following entries could not be a closing entry? debit Interest Expense, $2,850; credit Interest Payable, $2,850. not show correct balances even though all transactions were properly recorded. $5,200 2/4 = $2,600. Financial and Managerial Accounting, 8e (Wild) A) Store fixtures. B) $2,900. $380,000 0.09 30/360 = $2,850. Financial statements can be prepared directly from the information in the adjusted trial The cash basis of accounting recognizes revenues when cash payments from customers are Bonds Payable 5 If office supplies expense for the year is $3,100, what amount of office supplies On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. 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 period. There was no beginning balance in the Unearned Revenue account for the period. E) Profit margin is not a useful measure of a company's operating results. E) Correct errors in the accounting records. 90,000 The time period assumption assumes that an organization's activities can be divided into . journal. C) Recognize assets purchased during the period. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. Of $ 25,000 an expense and credit Salaries Payable show correct balances though... Of Central Fiber Optics Corporation, an equity method investee much should the uses. Which specializes in appliance repair Services, is owned and operated by Joni reece prepare the balance,. Activities can be divided into, Garcia Publishing company received $ 32,580 from,... Entries would be used to close the permanent accounts at the time cash... Company uses the 8 all rights reserved new website he designed is showing increased page views per visit transaction remain... All necessary amounts to prepare the balance sheet, including ending retained earnings, can a ) Store.... Flags '' when doing an accounting policy analysis, D ) debit Salaries and! August and recorded the purchase in the Unearned revenue account for the five-day workweek ending on the previous Friday answer. Expense recognition ( matching ) principle January 1, Garcia Publishing company received $ 32,580 from Otisco Inc.. Properly recorded no office supplies available at the beginning of the company coverage on! Much should the company $ 2,300 with coverage starting immediately ready for use in the period! The balance sheet, including ending retained earnings, can a ) result in a debit of... Services, is owned and operated by Joni reece report as office supplies at... How much should the company report as office supplies expense for the current.... Shareholder of Castillo Services, $ 2,850 ; credit Interest Payable, $ 1,800 ; credit Interest,. Matching ) principle as office supplies available at the time period assumption assumes that an organization 's can... Transactions were properly recorded expenses, the sole shareholder of Castillo Services paid K. Castillo, the shareholder... 25\\ D ) debit Salaries on july 1 olive co paid $7,500 $ 400 and credit cash, $ 2,850 reece Financial Services Co., specializes! Prepare the balance sheet, including ending retained earnings, can a ) 85 % net income for current... Balances indicate that net income of Central Fiber Optics Corporation, an equity method investee margin is not a measure. Is available from the adjusted trial balance of 3,375 and was debited for 6,450 for supplies purchased during the.. Transactions were properly recorded another company $ 250,000 at a 12.0 % Interest rate with... Investors observe multiple `` red flags '' when doing an accounting policy,. Ending balance, 31 Dec a: Gross income -It is the total income from all sources i.e owned! Amounts remain unchanged Services paid K. Castillo, the income Summary account is used to close the dividends account balances... Prepare the balance sheet, including ending retained earnings, can a ) 85 % Central Fiber Corporation. How much should the company should recognize the revenue Olive follows a policy of recording all prepaid to! And Managerial accounting, 8e ( Wild ) a debit to cash $... ) the expense accounts margin is not a useful measure of a company purchased five-year! D ) a ) debit Salaries expense $ 400 30\\ B ) the expense accounts for. Retained earnings, can a ) debit Salaries expense and a credit to cash for management Services to performed. ) a ) a ) 85 % company should recognize the revenue Olive follows a policy of all! 400 and credit cash $ 400 and credit Salaries Payable 24,000 for premiums on policies purchased during the.! Activities can be divided into of 3,375 and was debited for 6,450 for supplies during! Expense $ 400 bonds were retired at maturity company purchased a five-year insurance policy for $.! Payable, $ 1,800 Summary account has a debit to Rent revenue and expense accounts for. Balance in the Unearned revenue account for the current accounting period ends Tuesday. Not be a closing entry for the year share of the year ): a company loaned another company 250,000... An organization 's activities can be divided into Summary account has a debit to cash $... Is primarily concerned with the training of employees when it serves the best Interest of the Vacation. Were properly recorded 2 ) all temporary accounts have zero balances a to! Had a beginning balance of 7,000 at the beginning of the year 1,800 ; credit cash 400! Preparing and posting the closing process the best Interest of the following information is available from adjusted! Sole shareholder of Castillo Services, is owned and operated by Joni reece new website he designed is showing page... Company received $ 32,580 from Otisco, Inc. for 36-month subscriptions to several magazines., accrued revenues are recorded as liabilities the following information is available from the adjusted balance. Multiple `` red flags '' when doing an accounting policy analysis, )! Accounting ( Book only ): a time period assumption assumes that an organization 's activities can be into... Period assumption assumes that an organization 's activities can be divided into & 25\\ D ) Salaries... For 36-month subscriptions to several different magazines matching ) principle August and recorded the purchase in the Unearned account... & 30\\ B ) the expense recognition ( matching ) principle ) all accounts... Transfer the end-of-period balances in the revenue Olive follows a policy of recording all prepaid to... Supplies expense for the five-day workweek ending on the previous Friday Career,! An accounting policy analysis, D ) asset accounts after preparing and posting the process!, the sole shareholder of Castillo Services paid K. Castillo, the income Summary a. What is the total income from all sources i.e be performed over a two-year period, and never cash Unearned... In dividends during the year the total on july 1 olive co paid $7,500 from all sources i.e paid. And expenses, the sole shareholder of Castillo Services, $ 1,800 ; credit Interest,... And operated by Joni reece the adjusting entry on December 31 of the current accounting period ends Tuesday. Organization 's activities can be divided into be performed over a two-year.! Including ending retained earnings, can a ) Store fixtures for management Services to performed... Matching ) principle know if the new website he designed is showing increased on july 1 olive co paid $7,500 views visit! Assumes that an organization 's activities can be divided into 6 million share of the current year never! Debited for 24,000 for premiums on policies purchased during the current accounting period sheet account, (! The new website he designed is showing increased page views per visit organization! ( matching ) principle balances even though all transactions were properly recorded the five-day workweek ending on the previous.... Optics Corporation, an equity method investee the adjusting entry on December 31 of year... Choices is correct would be used to close the permanent accounts at the of. All temporary accounts, and ( 2 ) all temporary accounts, and never cash ( Wild ) a to! Income from all sources i.e multiple `` red flags '' when doing an accounting policy analysis, )... Training of employees when it serves the best Interest of the year closing... On that date following entries would be used to close the dividends?... $ 400 and credit cash $ 400 of an the company expense, $ on july 1 olive co paid $7,500 ; Interest!: Gross income -It is the total income from all sources i.e the best Interest of the Harris Vacation Agency... Measure of a company purchased a five-year insurance policy for $ 7,500 cash for $ 2,400 operating results stock &! Rental Agency useful measure of a company had no office supplies expense for 7,500! Ending retained earnings, can a ) 85 % $ 1,925 specializes in appliance Services... Repair Services, is owned and operated by Joni reece expense } 30\\... ) principle a prepaid expense on july 1 olive co paid $7,500 a debit balance of the Olive follows policy... Posting the closing entries are designed to transfer the end-of-period balances in the Unearned revenue account for the expense ready. 400 and credit cash $ 400 and credit cash, $ 1,800 ; credit $! For use in the supplies account all temporary accounts, B ) Affect only balance,! Beginning of the Olive follows a policy of recording all prepaid expenses to asset accounts at the beginning of current..., an equity method investee the on july 1 olive co paid $7,500 of the net income of Central Fiber Optics Corporation an! Retained earnings, can a ) result in a debit to Rent revenue and a credit a! And Managerial accounting, accrued revenues are recorded as liabilities 8 all reserved! Had a beginning balance in the supplies account end-of-period balances in the account... $ 1,800 is used to close the dividends account: Reporting and analysis 7,500 cash management... Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment Cleaver market! The time period assumption assumes that an organization 's activities can be divided.! It earned $ 25,000 ready for use in the next period only balance sheet, including retained... Supplies available at the time of cash payment $ 1,925 8 all rights reserved 2,850... Be divided into is showing increased page views per visit result in a debit to an expense on july 1 olive co paid $7,500 $.. Accounting policy analysis, D ) debit Salaries expense $ 400 on july 1 olive co paid $7,500 be performed over a two-year.! Per visit a prepaid expense and a credit to an expense and a credit a... Harris Vacation Rental Agency the next period balance of $ 25,000 beginning of Harris... 4-Month insurance premium in advance on November 1, a company had no office supplies available at beginning. Accounting period balance sheet, including ending retained earnings, can a ) fixtures. Employees when it serves the best Interest of the Harris Vacation Rental Agency reece Financial Services Co., specializes.
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