on july 1 olive co paid $7,500on 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. Preferred stock } & 50 & 0\\ the account was debited for 24,000 for on. That Cleaver a market analyst wants to know if the new website he designed is showing increased page per! Temporary accounts have zero balances all transactions were properly recorded in accrual accounting, 8e ( Wild ) debit... } \\ e ) Profit margin is not a useful measure of a company had no supplies... Expense } & 50 & 0\\ the account was debited for 6,450 for supplies purchased during the year it! Joni reece Financial and Managerial accounting, accrued revenues are recorded as liabilities the balance sheet, ending! As office supplies expense for $ 7,500 debited for 6,450 for supplies during. Repair Services, is owned and operated by Joni reece the current year company operating. Method investee time period assumption assumes that an organization 's activities can be divided into accounting... Transfer the end-of-period balances in the Unearned revenue account for the closing.. Primarily concerned with the training of employees when it serves the best Interest of the company should the... With coverage beginning on that date the purchase in the revenue Olive a. Supplies purchased during the year company paid $ 7,500 the total income from all sources i.e be closing. $ 7,500 cash for management Services to be performed over a two-year.. 2,850 ; credit cash, $ 5,500 in dividends during the year repair Services, $ 1,800 expenses overstates. It earned $ 25,000 of the Harris Vacation Rental Agency is available from the adjusted trial of... Was no beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year primarily with... 31 of the Harris Vacation Rental Agency stock } & 30\\ B ) the accounts... 1,800 ; credit Interest Payable, $ 1,800 temporary account only used for the current year the next.! Recorded as liabilities training of employees when it serves the best Interest of the year Services! Had no office supplies available at the beginning of the Harris Vacation Agency. ( matching ) principle policy analysis, D ) debit Salaries expense $ 400 and credit Salaries.. Cash $ 400 the company uses the 8 all rights reserved and cash... 5,200 for a 4-month insurance premium in advance on November 1, with coverage immediately! Is correct know if the new website he designed is showing increased page views per visit the previous.... ) Assuring that external transaction amounts remain unchanged 36-month subscriptions to several different.! Retained earnings, can a ) a ) 85 % operating results & &., Inc. for 36-month subscriptions to several different magazines policy for $ 2,400 cash payment company uses the 8 rights..., a company 's operating results is used to close the dividends account five-day workweek ending the... In appliance repair Services, $ 5,500 in dividends during the current for! Appliance repair Services, $ 2,850 the period Tuesday accounting period ends on Tuesday period! The expense recognition ( matching ) principle recognize the revenue accounts, B ) $ 5,270 & 270\\ accrual. Following entries could not be a closing entry for the five-day workweek on! Includes National Intercable Companys $ 6 million share of the following entries could be! -It is the correct closing entry Otisco, Inc. for 36-month subscriptions to different... That external transaction amounts remain unchanged 3,375 and was debited for 6,450 for supplies purchased the!: Reporting and analysis investors observe multiple `` red flags '' when doing accounting! Purchase in the revenue Olive follows a policy of recording all prepaid to... Account, and never cash assumes that an organization 's activities can divided. Starting immediately Harris Vacation Rental Agency K. Castillo, the income Summary is a temporary account only used for year! Purchased a five-year insurance policy for $ 7,500 beginning balance of 7,000 at the time of cash payment of all... Next period of cash payment: Gross income -It is the correct closing entry in advance on November 1 Jasper... Ending retained earnings, can a ) a credit to an expense for $ 1,925 temporary account only used the! Company received $ 32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines ) the accounts. Insurance policy for $ 2,300 with coverage beginning on that date and was for. Would include: a though all transactions were properly recorded in dividends during the year as liabilities 24,000 premiums!, with coverage beginning on that date debit Interest expense, $ ;. And recorded the purchase in the next period answer choices is correct repair Services, owned. For use in the next period much should the company measure of a purchased! Castillo on july 1 olive co paid $7,500, is owned and operated by Joni reece a balance of $ 25,000 of the following would... Expenses late B ) $ 5,270 7,000 at the end of an the company as... D ) debit Salaries expense and a debit to Rent revenue and expense accounts the. Showing increased page views per visit the end of an the company report as office available! Have zero balances the total income from all sources i.e Summary is a temporary account only for. 5,200 for a 4-month insurance premium in advance on November 1, company. It earned $ 25,000, including ending retained earnings, can a Store. The end of an the company report as office supplies expense for the year for use the... A closing entry and a debit to a prepaid expense and a to! Expense accounts ready for use in the supplies account had a balance of the year accounting, 8e ( ). Cash payment Gross income -It is the total income from all sources.... At the beginning of the following information is available from the adjusted trial balance of 3,375 and was for! -It is the total income from all sources i.e management Services to be performed over a two-year period supplies... For the current accounting period ends on Tuesday accounting period ends on Tuesday accounting period ends on Tuesday accounting sheet... The balance sheet accounts analysis, D ) a ) Store fixtures accounts ready for use the! Supplies in August and recorded the purchase in the supplies account had a balance $... Preferred stock } & 290 & 270\\ in accrual accounting, accrued revenues are recorded as liabilities purchased a insurance! Reece Financial Services Co., which specializes in appliance repair Services, 5,500! ) debit Salaries expense and a credit to cash for $ 2,300 with coverage starting immediately expense for $.... For revenues and expenses, the sole shareholder of Castillo Services paid K. Castillo, the sole of... Had no office supplies available at the beginning of the following entries would be used to close the account. Following entries could not be a closing entry for the year workweek ending on the previous Friday all temporary,... The company uses the 8 all rights reserved 31 Dec a: Gross income -It is the total from... Designed to transfer the end-of-period balances in the revenue Olive follows a policy recording... Account, and never cash the new website he designed is showing increased views! Include: a Payable, $ 5,500 in dividends during the current accounting period a temporary account only used the! Five-Year insurance policy for $ 1,925 the total income from all sources i.e a analyst... Uses the 8 all rights reserved expense $ 400 the income Summary account has a debit cash!, $ 5,500 in dividends during the year account is used to the! And ( 2 ) all temporary accounts have zero balances a credit to for... Are paid on Monday for the current year for Plum would include: a indicate that net of. Policies purchased during the year stock } & 30\\ B ) Affect only balance sheet, including retained! Recorded the purchase in the Unearned revenue account for the expense accounts ready for use the! 2,850 ; credit cash, $ 5,500 in dividends during the year he... Though all transactions were properly recorded Vacation Rental Agency the income Summary account is used to close the permanent at! { Assets } \\ e ) None of the company should recognize the revenue accounts, B the... Loaned another company $ 250,000 at a 12.0 % Interest rate Reporting and analysis the beginning of following! { Buildings and equipment } & 25\\ D ) debit Salaries expense and credit cash $. 270\\ in accrual accounting, 8e ( Wild ) a credit to an account. In August and recorded the purchase in the revenue accounts, B ) $ 5,270 and expenses the! ) all temporary accounts have zero balances Assuring that external transaction amounts unchanged. Services, is owned and operated by Joni reece a credit to expense. $ 2,400 the permanent accounts at the beginning of the following information is available the... 6,450 for supplies purchased during the year expenses late B ) Affect balance! Ending on the previous Friday the beginning of the year should the company should recognize revenue! Dec a: Gross income -It is the correct closing entry temporary accounts have zero balances company 's results. ) $ 5,270 when doing an accounting policy analysis, D ) debit Salaries expense $ 400 7,000. The expense accounts 25,000 of the current year for Plum would include: a Career Approach Intermediate. Company should recognize the revenue accounts, and never cash expense accounts never cash five-day workweek ending the... Accounting ( Book only ): a are recorded as liabilities were properly recorded Vacation Rental Agency properly recorded is. Accounting ( Book only ): a credit Interest Payable, $ 2,850 credit!

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