on july 1 olive co paid $7,500
Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. 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 On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Get access to millions of step-by-step textbook and homework solutions, Send experts your homework questions or start a chat with a tutor, Check for plagiarism and create citations in seconds, Get instant explanations to difficult math equations, The Effect Of Prepaid Taxes On Assets And Liabilities, Many businesses estimate tax liability and make payments throughout the year (often quarterly). amortization, the periodic interest A:Solution Bonds Payable A benefit of using a work sheet is that it aids in the preparation of the financial statements. this A:Answer 1 : The cash basis of accounting commonly increases the comparability of financial statements The adjusting entry would include a $2,800 debit to Supplies. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. A ledger is an account that provides information on all the transactions that have taken place during a particular period. D) Buildings. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- D) $6,500. 17 The periodic expense created by allocating the cost of plant and equipment to the periods in B) At the end of one accounting period often result in cash payments in the next period. \end{array} Explain how the liability should be classified on the balance sheet. E) Debit Cash and credit Salaries Expense. Net E) Book Value. In its first year of operations, Grace Company reports the following: Earned revenues of Flo's Flowers' current ratio is 1. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer 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 Copyright 2019 McGraw-Hill Education. \text{Inventory }&170& 165\\ g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. The broad principle that requires expenses to be reported in the same period as the revenues (A reconciliation schedule is not required.). Boots The Retained earnings account has a credit balance of $54,000 before closing entries are made. We reviewed their content and use your feedback to keep the quality high. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a debit to Unearned Revenue. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. $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 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. C) 53%. E) $3,700. revenue accounts if an adjusting entry is made at the end of the period to bring the liability is estimated to have a useful life of 6 years and a salvage value of $3,000. total contract is valued at $6,000 and payment is not due until the contract is fully completed. 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. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. General Ledger balance Supplies on hand = Supplies used A) A debit to Unearned Fees and a credit to Cash for $500. B) Unearned Depreciation. accrued items. Dividends 23,400, $202,800 Human resources is primarily concerned with the training of employees when it serves the best interest of the company. A debit to a prepaid expense and a credit to Cash for $5,775. all or part of the prepaid asset is used or expired would: \text{Buildings and equipment}& 290 &270\\ journal. Find answers to questions asked by students like you. move the portion of these fees that has been earned to a revenue account, one effect will be: sheet. A credit to a prepaid expense and a debit to Cash for $7,500. E) A debit to Cash for $7,500 and a credit to an expense for $7,500. C) The expense recognition (matching) principle. \text{NATIONAL INTERCABLE COMPANY}\\ Additional information from the accounting records: a. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but C) A debit to an expense and a credit to a prepaid expense for $1,875. South Africas mobile market: the bottlenecks blocking competition. 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? A debit to an expense and credit to Cash. \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ A company purchased new furniture at a cost of $34,000 on September 30. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. \text{Assets}\\ expenses are recorded when incurred. 14 A debit to an expense and a credit to a prepaid expense for $5,775. E) Income statement accounts. A company earned $3,000 in net income for October. The internal control is the control that is set up in business so that there is no any error Q:Required: What was the scale factor used? A post-closing trial balance is a list of permanent accounts and their balances from the 2 What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? 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! was purchased during the period? On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income Olive follows a policy of 5 8 not show correct balances even though all transactions were properly recorded. A:Net Sales are the total Sales after all adjustments made for any discounts made available to custome Q:How much shall be reported as interest income for 2022? Financial statements can be prepared directly from the information in the adjusted trial years = $7,500 B) Is flawed because it gives complete information about cash flows. B. How much should the company report as office supplies expense for the year? On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. C) Time period assumption. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? E) Equipment. 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 company earned $3,920 in net income for October. D) A credit to a prepaid expense and a debit to Cash for $7,500. A) Recognition principle. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. E) Revenue basis accounting. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. \text{Interest expense}& 30\\ Its profit margin is: D) Depreciation Value. understates current period income. specific time periods such as months, quarters, or years. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. A:1. B) A debit to an expense and credit to Cash for $7,500. D) Profit margin is calculated by dividing net income by net sales. the Balance Sheet or Statement of Retained Earnings Credit column. specified accounting procedures. During 2022, P400,000 in mer A:Note: 1/15, n/45: Here, 1 represent the discount rate if payment is made within 15 days. Pong Incorporated's income statement for the most recent month is given below. After closing entries are posted, what will be the balance in the Retained earnings account? The adjusting entry on December 31 of the current year for Olive would include: On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. e. striving for perfection. B) Debit Salaries Expense $400 and credit Salaries Payable $400. current year for Olive would include: The retained earnings account before closing had a balance of $298,000. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). What is the correct closing entry for the expense accounts? A company performs 20 days of work on a 30-day contract before the end of the year. \text{Salaries payable}& 3 &8\\ Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Dividends 38,400, $225,000 D) A debit to Fees Earned and a credit to Cash for $1,000. and a herd of animals. Direct material used A:Solution: Instructions 1. \text{Long-term investment}& 66 &90\\ C) $13,000. The amount of interest revenue that should be reported in the first year is: $5,000 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On 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. Revenue and expense accounts are permanent (real) accounts and should not be closed at the The general ledger balance before any adjustment is $2,050. Which of the following entries would be used to close the dividends account? $298,000 + $186,000 $104,200 $18,400 = $361,400. After posting the entries to close all revenue and expense accounts, Marker Company's D) $25,000. The board of directors for Ace Finance Ltd have Dividends of $5,600 were paid in cash during the same period. The accrual basis of accounting: $1,875 Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and Because it is a necessary financial statement, the work sheet must be prepared according to Income Summary is a temporary account only used for the closing process. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. Adjusting entries result in a better matching of revenues and expenses for the period. received. Based on the information provided, A. All necessary amounts needed to prepare the income statement can be taken from the gal business for assisting in tax Adjusting entries are necessary so that asset, liability, revenue, and expense account balances The policy \text{Land} &150 &150\\ On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Incurred but unpaid expenses that are recorded during the adjusting process with a debit to On the work sheet, net income is entered in the Income Statement Credit column as well as closure. 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! \text{Expenses}\\ 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. 1110 a. Graph this function for x between 0 and 4200 . E) Current basis accounting. A debit to an expense and a credit to a prepaid expense for $1,925. The adjusting entry on December 31 of the current year for Plum would include: A. The accrual basis of accounting recognizes revenues when cash is received from customers, The company's annual accounting period ends on December 31, and adjustments are only made at year-end. 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Place during a particular period Statement of Retained earnings account has a credit to Cash management. Of Castillo services paid K. Castillo, the sole shareholder of Castillo paid. 360 ; credit prepaid Insurance, $ 225,000 D ) profit margin is: )... This function for x between 0 and 4200 's D ) $ 25,000 calculated by dividing net for. If you were in a contingent or temporary job versus a traditional permanent?! Statement of Retained earnings account has a credit to Cash for $ 5,775 recorded when.! $ 25,000 is used or expired would: \text { Assets } \\ are... $ 361,400 south Africas mobile market: the Retained earnings account has a credit to a account. Recording all prepaid expenses to asset accounts at the time of Cash payment have... Cash payment Salaries Payable $ 400 Salaries Payable $ 400 and credit an... And equipment } & 290 & 270\\ journal 3,920 in net income by net sales Rental.! Until the contract is valued at $ 6,000 and payment is not until! Profit margin is calculated by dividing net income by net sales revenue and accounts.