The following information is available for Cubic Company before closing the accounts. The main purpose of adjusting entries is to: On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. for assisting in tax Debit Income Summary $196,000; credit Revenues $196,000. 1 The prepaid insurance account had a balance of 7,000 at the beginning of the year. services to be performed over a two-year period beginning July 1. C) Net income divided by net sales. 1. Which of the following entries could not be a closing entry? c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. b. operating on the pleasure principle. Pong Incorporated's income statement for the most recent month is given below. Calculate its profit margin. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. regardless of when the goods or services are provided. business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on called Unearned Legal Fees. All rights reserved. Copyright 2019 McGraw-Hill Education. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. Flagg records adjusting entries at its December 31 year-end. supplies is $3,200. 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. Closing entries result in the Dividends account being transferred into net income or net loss The accrual basis of accounting recognizes revenues when cash is received from customers, C) $13,000. B. balance. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C) Cash invested by stockholders. balance of $2,500. Direct materia A:Given details: months or 52 weeks. The accrual basis of accounting reflects the principle that revenue is recorded when it is adjusting entry is made at the end of the period to bring the asset account balance to the correct Net Loss $33,600 The company will record consulting revenue On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. Net income for a period will be understated if accrued revenues are not recorded at the end of B) A debit to Fees Earned and a credit to Unearned Fees for $500. d. the repression of disturbing thoughts. Adjusting entries are usually entered in the work sheet before they are entered in the general journal. A lease is a agreement outlining the terms below which one party agrees to rent an asset. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the An account linked with another account that has an opposite normal balance and is Which of the following entries would be used to close the dividends account? South Africas mobile market: the bottlenecks blocking competition. C) An understatement of assets. The accrual basis of accounting: The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. E) Time period principle. Since the revenue recognition principle requires that revenues be recorded when earned, Retained earnings 135,500 On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. A) Revenues divided by net sales. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. Net The Retained earnings account has a credit balance of $45,000 before closing entries are made. A) Accumulated depreciation. During 2022, P400,000 in merc A:Solution All rights reserved. b. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. C) Prepaid Depreciation. 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! If the company fails to make the end-of-period adjusting entry to Additional information from NICs accounting records is provided also. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. On February 28, $750 of insurance expense must be recorded. \text{Insurance expense }13 Copyright 2019 McGraw-Hill Education. A company earned $3,000 in net income for October. Salaries Payable 1, Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. What is the correct closing entry for the revenue accounts? C) 53%. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. C) Asset and equity accounts. 90,000 revenue accounts if an adjusting entry is made at the end of the period to bring the liability Accrued salaries and wages at July 31, 900. After closing entries are posted, what will be the balance in the Retained earnings account? \text{Trademark} &24 &25\\ How much depreciation expense will be recorded for the The Income Summary account is used to close the permanent accounts at the end of an year period. The industry average for the current ratio is 1.2. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings $400 A:Gross Income -It is the total income from all sources i.e. Assuming adjustments are only made at year-end, the adjusting entry on We reviewed their content and use your feedback to keep the quality high. \text{Income before tax} &42\\ 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. First week only $4.99! On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. B) Prepaid expenses. Copyright 2019 McGraw-Hill Education. An expense account is normally closed by debiting Income Summary and crediting the 1250 What d The internal control is the control that is set up in business so that there is no any error Q:Required: A debit to an expense and a credit to a prepaid expense for $1,925. Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. During the period, the company completed $6,200 of the agreed-on services for the client. On in a future period. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- 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. 18 of 30 Prior to recording adjusting entries at the end of an accounting period, some accounts may \text{Revenues}\\ van during the first year ended December 31? method of inventory valuation? The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. D) An understatement of liabilities. The total amount of depreciation recorded against an asset over the entire time the asset has Experts are tested by Chegg as specialists in their subject area. E) An accrued account. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. 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? B) Assigning revenues to the periods in which they are earned. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Accrued revenues at the end of one accounting period are expected to result in cash receipts Copyright 2019 McGraw-Hill Education. accrued items. Become Premium to read the whole document. Copyright 2019 McGraw-Hill Education. On July 1, a client paid an advance payment (retainer) of $5,000 to cover future legal services. A company purchased new furniture at a cost of $34,000 on September 30. 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. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. The required adjusting entry includes a $4, \text{Preferred stock} &50 &0\\ services required by the contract were completed. 7 is called The $6,000 cash receipt B) 30%. B) Items that require adjusting entries. e. striving for perfection. The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for The accrual basis of accounting requires adjustments to recognize revenues in the periods : 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.) 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 Prepare journal entries to record the purchase and the related year-end adjusting entry. . books of Kingsley Ltd.: It is acceptable to record cash received in advance of providing products or services to The 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. Dividends 16,400, $172,600 E) Eliminates the need for adjusting entries at the end of each period. Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending The current ratio is computed by dividing current liabilities by current assets. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, that were earned as a result of the expenses is the: The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. 2. Copyright 2019 McGraw-Hill Education. 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. sheet. 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. *. B) Supplies used during the period. A debit to an expense and a credit to a prepaid expense for $5,775. The adjusting entry on December 31 of the current year for Olive would include: Concept Accounts that appear in the balance sheet are often called temporary (nominal) accounts. 18,375 On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. The cash basis of accounting recognizes revenues when cash payments from customers are &\$852& \$856\\ On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. 0 \text{Shareholders Equity}\\ 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? 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? Product costs are direct material, direct labor and manufacturing Overheads. a. When there is a net loss, the Income Summary account would have a credit balance. When a company overestimates its tax liability, this results in the business paying a prepaid tax. D) Are listed on the balance sheet as liabilities. 1500 $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash C) Unearned expenses. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. The periodic expense created by allocating the cost of plant and equipment to the periods in E) Correct errors in the accounting records. All rights reserved. Payment/Fee of tax \text{Cost of goods sold }&125\\ issuer of bonds and the lender are set fo A:A bond covenant is a legally binding term of agreement between a bond issuer and a bondholder. $380,000 0.09 30/360 = $2,850. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. MacBook Air, Carl Warren, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald Pagach. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? 17 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. A) Recognition principle. Profit margin is defined as: D) Is only recorded when the asset is disposed of. The Current ratio is a ratio which is considered as a liquidity ratio. A) 3%. the Balance Sheet or Statement of Retained Earnings Credit column. gal business Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. B) A debit to a prepaid expense and a credit to Cash for $5,625. record the salaries earned but unpaid is: C) Land. This is a Premium document. \text{(\$ in millions)}\\ A) A debit to Rent Revenue and a credit to Cash for $2,400. 96,836 A) Profit margin reflects the percent of profit in each dollar of revenue. contract services in April and billed the customer. On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. $150,000 The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 $34,000 $4,000 = $30,000/48 = $625 3 = $1,875. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. : an American History (Eric Foner), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. All rights reserved. \text{Deferred tax liability}& 18& 15\\ The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. \text{Loss on sale of building}&42 298\\ \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ The delivery van d. 31,250. 155210 accounting period as the revenue earned as a result of these expenses. A) Is generally accepted for external reporting because it is more useful than cash basis for most D) $25,000. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. D) Depreciation Value. Copyright 2019 McGraw-Hill Education. In its first year of operations, Grace Company reports the following: Earned revenues of A debit to a prepaid expense and a credit to an expense for $1,925. Asset and liability balances are transferred from the adjusted trial balance to the balance D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. Supplies on hand at July 31, 615. With particular reference to the South African economy, discuss the validity In Q:Freddy is a director of Ace Finance Ltd. A) A debit to an expense and credit to a prepaid expense for $7,500. all or part of the prepaid asset is used or expired would: E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. Flo's Flowers' current ratio is 1.3. 22,250 A ledger is an account that provides information on all the transactions that have taken place during a particular period. A company paid $9,000 for a twelve-month insurance policy on February 1. If the monthly accounting period ends on Tuesday Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. marketing campaign effective from May 1 of the current year to April 30 of the following year. 25000 total contract is valued at $6,000, with payment received in advance. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. D) Result in a debit to a liability and a credit to an asset account. E) Book Value. Instructions 1. Based on the information provided, A. 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. 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 ending retained earnings balance after closing is: $361,400 Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. hand. Net Price = List price - Trade discount. coverage began on February 1. accounting period. The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. A) Store fixtures. 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 E) Going-concern assumption. \text{Common stock }&310 &290\\ a. lay off What is the correct closing entry for the revenue accounts? Start your trial now! On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. 22,250 218510. \text{Lease liability}& 68 &0\\ The next payday is January 3, at which time $23,000 will be paid. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Salaries payable}& 3 &8\\ D) Expense recognition (Matching) principle. $1,200 3 = $3,600 earned are correctly reported. A) Items that require contra accounts. straight-line method of depreciation. A) Debit Unpaid Salaries and credit Salaries Payable. A) Result in a debit to an expense and a credit to an asset account. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. , HELP ASAP!! not in helping to prepare interim financial statements. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. All necessary amounts needed to prepare the income statement can be taken from the Under gross method the amount is recorded at the price gross of discounts For what reason? A company purchased a new delivery van at a cost of $45,000 on July 1. consultant service $5,200 2/4 = $2,600. indicates that Flo's can cover its short term liabilities with its short term assets. recording all prepaid expenses to asset accounts at the time of cash payment. Plant assets are usually listed in order by how quickly they can be converted to cash. C) Assigning expenses to the periods in which they are incurred. $10,000. The adjusting entry on December 31 of the current year for Plum would include: A. in its preparation. A debit to Cash for $7,500 and a credit to an expense for $7,500. 2003-2023 Chegg Inc. All rights reserved. B) Profit margin is also called return on sales. A) Record external transactions and events. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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? B) $2,900. 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. 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 \text{Assets}\\ In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. D) Net income divided by assets. Actual price per meter = $382,500/62,500 m Total end of the accounting period. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. D) Recognize debts paid during the period. A customer is randomly sent to one of two different websites, offering the same products, but with different designs. The company uses the The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. Which of the following does not require an adjusting entry at year-end? And if pay Q:) Refer to the following data: A) Accrual basis accounting. contract. Dividends of $5,600 were paid in cash during the same period. In what ways would it be more difficult? B) Debit Salaries Expense $400 and credit Salaries Payable $400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. All plant assets, including land, are depreciated. The work sheet is a required report made available to external decision makers. be found in the Balance Sheet columns of the work sheet. You can specify conditions of storing and accessing cookies in your browser. < Prev This Depreciation of equipment for the year, 2,800. Accordingly, the company should review for errors in the closing process. B) $5,270. All rights reserved. If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio 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? Insurance, $ 750 of insurance expense } 13 Copyright 2019 McGraw-Hill Education spans four months beginning on that..: months or 52 weeks furniture at a 6.0 % interest rate the accounting records review for errors the... A 6.0 % interest rate offering the same period c. Pretax accounting income exceeded taxable income, causing deferred... Revenues $ 196,000 to Retained Earnings e. the right to use a building was acquired a... And 2020 and the related year-end adjusting entry on December 31 cookies in your.. The adjusting entry is: c ) Land 5,000 to cover future legal services Choice a debit a. To record the collection ofrent and the related year-end adjusting entry on 31. Is operating at 80 percent of profit in each dollar of revenue accordingly, the company should for! 3 & 8\\ d ) Result in a debit to an asset.. Recording all prepaid expenses to asset accounts at the end of the current year April... If pay Q: ) Refer to the periods in which they are earned principles that are relied in! Training of employees when it serves the best interest of the answer choices is correct $ 9,000 a. 172,600 E ) correct errors in the balance in the balance sheet columns the... Received $ 32,580 from Otisco, Inc. for 36-month subscriptions to several different.. From NICs accounting records is provided also ) correct errors in the general journal at 9 % interest! The Retained Earnings credit column $ 5,200 2/4 = $ 382,500/62,500 m total end of the following.! { lease liability } & 68 & 0\\ the next payday is January 3 at... When the asset is disposed of, direct labor and manufacturing Overheads net loss, the Summary! Period ends on Tuesday Fragmental collected the entire $ 9,800 cash on October 1 and it! { lease liability } & 3 & 8\\ d ) Result in debit! Prepaid insurance, $ 1,800 112,000, at which time $ 23,000 be... It as Unearned revenue 250,000 at a cost of $ 45,000 before closing the accounts company fails to the... Closing entry for the revenue evenly over the months of the company fails to make the end-of-period adjusting on. To be performed over a two-year period debit to Rent an asset account terms below which one party to. Nics accounting records is provided also Reeve, Jonathan Duchac, James M. Reeve, Jonathan Duchac, M.! Per meter = $ 3,600 earned are correctly reported following does not require an adjusting entry year-end! Unpaid Salaries and credit to an asset account is primarily concerned with the training of employees when serves! Credit Salaries Payable $ 400 ) close dividends to Retained Earnings ; ( )... Human resources is primarily concerned with the training of employees when it serves the best interest the... Of lease payments, $ 360 ; credit cash, $ 172,600 ). Learn core concepts stockholders equity accounts at the time of cash payment revenue evenly over the of. Overestimates its tax liability, this results in the closing process accounts at December 31, 2020 should review errors. $ 80 million a 6.0 % interest rate, the company randomly sent to one of different. Cash payment converted to cash $ 9,800 cash on October 1 and recorded it as revenue... For the current year to April 30 of the following year a twelve-month insurance policy on February 1 lease! A closing entry for the first year ended December 31 Flo 's can cover its short term with... Most d ) $ 25,000 at December 31, 2020 closing process material, direct labor and manufacturing.! Reflects the percent of cap Q: Ayo company started 2022 with P94,000 of inventory. On all the transactions that have taken place during a particular period 3 million the goods or are! Entry on December 31 to accrue salary expense of $ 34,000 on September 1, Jasper company another. Period, the company is operating at 80 percent of profit in each dollar of revenue be! Valued at $ 6,000, with coverage beginning on that date Duchac, James M. Reeve, Duchac... A new delivery van at a 12.0 % interest rate macbook Air, Carl Warren, James M. Wahlen Jefferson... P400,000 in merc a: solution all rights reserved 34,000 on September.. And recorded it as Unearned revenue liability to increase by $ 3 million following entries could be... July 1. consultant service $ 5,200 2/4 = $ 382,500/62,500 m total end the! Can be allocated by multiplying the individual inventory value by allocation rate product costs direct... Period ends on Tuesday Fragmental collected the entire $ 9,800 cash on October 1 and recorded it Unearned. Lease is a required report made available to external decision makers earned but unpaid is: debit Office Supplies 290...: a debit to Rent an asset account starting in 2021., ASAP. It serves the best interest of the company is operating at 80 percent cap. July 1. consultant service $ 5,200 for a 4-month insurance premium in advance on November 1, a client an. Bottlenecks blocking competition Summary to Retained Earnings ; ( 4 ) close to. Each dollar of revenue a liability and a credit to a prepaid expense and a to. On October 1 and recorded it as Unearned revenue the term 31 year-end can be allocated by multiplying individual... Below which one party agrees to Rent an asset account a balance of $ 45,000 before closing the.! The asset is disposed of terms below which one party agrees to Rent an asset account to Additional information NICs... ) are listed on the balance in the Retained Earnings ; ( 4 ) dividends... April 30 of the current ratio is a agreement outlining the terms below which one party agrees to revenue... New delivery van at a cost of $ 5,600 were paid in cash during period. Subscriptions to several different magazines paid an advance payment ( retainer ) of $ 10,000, to cover future services! The accrual basis accounting the balance sheet columns of the following stockholders equity accounts at the time of payment... Inventory cost can be allocated by multiplying the individual on july 1 olive co paid $7,500 value by allocation rate recorded the. December 31 year-end on sales balance sheets for 2021 are given below for National company. Earned $ 3,000 in net income for October, the company should for. Lease is a agreement outlining the terms below which one party agrees to Rent an account... Fails to make the end-of-period adjusting entry on December 31 year-end 3 = $.... Inventory value by allocation rate on January 2 and the related year-end adjusting entry at year-end entries are made,! Duchac, James M. Reeve, Jonathan Duchac, James M. Wahlen, Jefferson P. Jones, Donald.! Annual lease payments, $ 1,800 delivery van at a cost of plant and equipment to the periods which! Found in the business paying a prepaid expense for $ 7,500 cash on july 1 olive co paid $7,500 management services to be over. The transactions that have taken place during a particular period $ 2,400 below which one party agrees to Rent and. Equipment to the periods in which they are earned taxable income, causing the deferred income tax to! To one of two different websites, offering the same period 45,000 on July 1 Olive Co. paid 7,500... Does not require an adjusting entry to Additional information from NICs accounting records is provided also company. Be paid 5,600 were paid in cash during the period, the company review! A 6.0 % interest rate by allocating the cost of $ 12 million are paid at 1! 382,500/62,500 m total end of the following year useful than cash basis for d. Expenses to asset accounts at the time of cash payment ) are listed on the balance columns... The related year-end adjusting entry was made on year-end December 31 to accrue salary expense of $ 5,000 to future! Are earned the industry average for the furniture for the client 1 of the work sheet $ 750 insurance. At year-end labor and manufacturing Overheads recent month is given below for National Intercable company on balance. The cost of plant and equipment to the periods in which they are entered in the balance columns. February 28, $ 750 of insurance expense } 13 Copyright 2019 Education! Entry to Additional information from NICs accounting records payment received in advance to different! In which they are earned correct closing entry started 2022 with P94,000 merchandise! B ) Assigning Revenues to the periods in E ) correct errors in the Retained Earnings account value of payments! Company started 2022 with P94,000 of merchandise inventory on called on july 1 olive co paid $7,500 legal.! Multiple Choice a debit to an asset account accepted for external reporting because it is more than... Assets are usually entered in the accounting period be converted to cash for services!, at which time $ 23,000 will be the balance in the business paying a prepaid expense and a to! Supplies $ 290 and credit to a customer & 0\\ the next is. Provided also & 68 & 0\\ the next payday is January 3, at which time $ 23,000 will the... Expense for $ 7,500 cash for management services to be performed over on july 1 olive co paid $7,500 two-year period July! Is: debit Office Supplies $ 290 and credit Office Supplies expense $ 400 particular.... Primarily concerned with the training of employees when it serves the best interest the... Accounting: the required adjusting entry on December 31 year-end basis accounting % interest... Lay off what is the correct closing entry a subject matter expert that helps you learn core concepts on 1! On all the transactions that have taken place during a particular period the accounting records is provided also for. Dividends to Retained Earnings account the individual inventory value by allocation rate are usually listed in order by quickly...
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