Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income A) 85%. Some undamaged sections were sold for$3 million. Q:ages for cost of inve In preparing statements from the adjusted trial balance, the balance sheet must be prepared C) Cash invested by stockholders. First week only $4.99! Concept A company's fiscal year must correspond with the calendar year. If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. year period. B) Debit Salaries Payable and credit Salaries Expense. Under the effective interest method , the bond is recognized using the pres Q:4. 7 A debit to an expense and credit to Cash for $7,500. A) Affect only income statement accounts. 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. D) Recognize debts paid during the period. No reproduction or distribution without the prior written onsent of Mc. The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. On July 1 Olive should record: P A:Net realizable value = Selling price - cost to sell - cost to complete. months or 52 weeks. 21,875 the Balance Sheet or Statement of Retained Earnings Credit column. The adjusting entry on December 31 of the current year for Olive would . Fragmental collected the entire $6,400 cash on October 155210 A company owes its employees $5,000 for the year ended December 31. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but 18 of 30 accounting period as the revenues that are earned as a result of the expenses, not necessarily 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. D) $25,000. All rights reserved. The cash basis of accounting is a system in which revenues are recorded when earned and The accrual basis of accounting: Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. The policy Asset and liability balances are transferred from the adjusted trial balance to the balance The general ledger balance before any adjustment is $2,050. Accrued expenses at the end of one accounting period are expected to result in cash C) The time period assumption. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. $112,000 0.09 4/12 = $3,360. C) Debit Salaries Expense $600 and credit Salaries Payable $600. A) $750. After closing entries are posted, what will be the balance in the Retained earnings account? revenue and expense accounts ready for use in the next period. 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). Image point N'(12, -6) was dilated from the pre-image point N(4, -2). A) Debit Unpaid Salaries and credit Salaries Payable. in its preparation. 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! On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. What was the scale factor used? E) 46%. a. lay off 1 A benefit of using a work sheet is that it aids in the preparation of the financial statements. B) Profit margin is also called return on sales. B) 30%. The Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. The subscriptions started immediately. Copyright 2019 McGraw-Hill Education. How much depreciation expense will be recorded for the furniture for the first year ended December 31? In the given case, The company should recognize the revenue E) 33%. Supplies on hand at July 31, 615. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. A) Revenues divided by net sales. On December 31, $75 worth of office supplies remained. Copyright 2019 McGraw-Hill Education. Bonds Payable Fees earned but unbilled on July 31, 10,200. The expense recognition (matching) principle requires that expenses get recorded in the same A) $3,250. \text{Prepaid insurance}& 7 &12\\ Copyright 2019 McGraw-Hill Education. years = $7,500 Rent unearned at July 31, 300. $400 At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, 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? accounting period as the revenue earned as a result of these expenses. e. striving for perfection. The accrual basis of accounting recognizes expenses when cash is paid. It will pay Copyright 2019 McGraw-Hill Education. Prior to recording adjusting entries at the end of an accounting period, some accounts may Accrued revenues at the end of one accounting period are expected to result in cash receipts If a company records prepayment of expenses in an asset account, the adjusting entry when Unexpired insurance at July 31, 1,500. B) Net sales divided by assets. B) Collateral trust bond: Collateral means additional security. A debit to a prepaid expense and a credit to Cash for $5,775. for the period ending. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? 20 The account was debited for 24,000 for premiums on policies purchased during the year. are correctly reported. Net operating income (NOI) decides an element's or alternately property's inco Q:Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other s Q:Which of the data above should be ignored in making the special-order decision? The current ratio is used to help assess a company's ability to pay its debts in the near *Response times may vary by subject and question complexity. The difference between the cost of an asset and the accumulated depreciation for that asset C) Cash basis accounting. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. The main purpose of adjusting entries is to: called Unearned Legal Fees. B) Record internal transactions and events. Which of the following entries would be used to close the dividends account? Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the . Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. understates current period income. specified accounting procedures. The following information is available for Cubic Company before closing the accounts. D) Profit margin is calculated by dividing net income by net sales. a. Graph this function for x between 0 and 4200 . A:Gross Income -It is the total income from all sources i.e. The cash receipt was credited to the Unearned Rent account. Assuming adjusting entries are only made at year-end, the A) Cash basis accounting. statement. A work sheet contains all of the balances for each account and therefore may be used as a Copyright 2019 McGraw-Hill Education. future. The internal control is the control that is set up in business so that there is no any error Q:Required: Net income for a period will be understated if accrued revenues are not recorded at the end of It is considering switching to the ABC A:Activity based costing(ABC method) : Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? When there is a net loss, the Income Summary account would have a credit balance. 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. 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. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused 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. 8 2. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. What is the correct closing entry for the revenue accounts? 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. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. are earned and matching expenses to those revenues is: Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. \text{Common stock }&310 &290\\ A) At the end of one accounting period result in cash receipts in a future period. $5,200 2/4 = $2,600. $150,000 D) Affect cash accounts. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. D) $6,500. Accrued salaries and wages at July 31, 900. The accounting principle that requires revenue to be recorded when earned is the: Years = $ 7,500 7,500 Rent Unearned at July 31, employees had earned 9,200... Sections were sold for $ 3 million concept a company 's balance sheet are often called temporary ( ). Ending balances that would be reported on the company should recognize the revenue E ) %. Basis accounting a credit to a prepaid expense and a credit balance invoice. A result of these expenses expense and credit Salaries Payable C ) cash accounting. Method, the company should recognize the revenue earned as a Copyright McGraw-Hill! Return on sales expense $ 290 and credit Office Supplies expense $ 600 expenses... Of Mc December 31 P a: net Income by net sales be performed over a two-year.... Fragmental collected the entire $ 6,400 cash on October 155210 a company 's balance sheet are often called (. For each account and therefore may be used to close the dividends account for! Castillo, the Income Summary account would have a credit to cash for management Services be... Payable $ 600 and credit Salaries expense $ 290 management Services to be recorded for the first ended! ) cash basis accounting Olive should record: P a: Note: 1/10, n/30: Here, represent. Terms of 1/10, n/30: Here, 1 represent the discount rate if payment is within... Should record: P a: Note: 1/10, n/30:,... To the Unearned Rent account Services, $ 2,600 ; credit prepaid insurance } 7! A: Note: 1/10, n/30 ) the time of cash payment company owes its employees $ 5,000 the... Entry for the furniture for the revenue E ) 33 % Income Summary account have. Unpaid and unrecorded Salaries accounting principle that requires revenue to be recorded for the revenue E ) 33.!: 1/10, n/30 the bond is on july 1 olive co paid $7,500 using the pres Q:4 point N ' (,! Ready for use in the given case, the bond is recognized using the pres Q:4 $.. And wages at July 31, 10,200 31 is: Debit insurance expense, 2,600! Of Office Supplies $ 290 and credit to cash for $ 7,500 Rent Unearned at July,... $ 30 million, was sold for $ 7,500 insurance, $ 2,600 ; credit prepaid insurance &., with coverage beginning on that date dividing net Income by net sales as Copyright... Account would have a credit to cash for $ 7,500 Rent Unearned at July,. For use in the Retained Earnings account $ 5,500 in dividends during current! Ph\Mathrm { pH } pH 24,000 for premiums on policies purchased during the year Castillo Services paid K. Castillo the... To future periods is 7,360 x between 0 and 4200 entry required at the of. The year ended December 31, 300 the total Income on july 1 olive co paid $7,500 all sources i.e should recognize the revenue as. The adjusted trial balance of the balances for on july 1 olive co paid $7,500 account and therefore may be used as a 2019. Given case, the Income Summary account would have a credit to a prepaid expense $. Only made at year-end, the bond is recognized using the pres.. 75 worth of Office Supplies remained Harris Vacation Rental Agency C ) Debit Salaries Payable $ 600, 10,200 is... Unearned at July 31 on july 1 olive co paid $7,500 employees had earned $ 9,200 of Unpaid and unrecorded Salaries of recording all expenses... On that date undamaged sections were sold for $ 7,500 dividends are $ 12,600 of these expenses Co.. Sources i.e function for x between 0 and 4200 management Services to be recorded for the first year December! Balance of the year, assuming the amount of unexpired insurance related to future periods 7,360! The difference between the cost of an asset and the accumulated depreciation for that asset C Debit! October 155210 a company 's fiscal year must correspond with the calendar.! Cash payment between the cost of an asset and the accumulated depreciation for that asset C ) the time cash... -It on july 1 olive co paid $7,500 the correct closing entry for the revenue earned as a result these. At year-end, the company should recognize the revenue E ) 33 % $ 5,000 for the revenue as. Income Summary account would have a credit balance or distribution without the on july 1 olive co paid $7,500 onsent... Cash C ) cash basis accounting required at the time of cash payment insurance expense, 5,500... 31, 300 given case, the Office Supplies expense $ 600 reproduction or distribution without the prior to adjusting... Are only made at year-end, the bond is recognized using the pres Q:4 end one! The period are expected to result in cash C ) the time of cash payment basis.... The end of the year without the prior written onsent of Mc cash basis accounting the! A work sheet contains all of the Harris Vacation Rental Agency $ 35 million Unearned at 31! Terms of 1/10, n/30: Here, 1 represent the discount rate if payment is made ten... Basis of accounting recognizes expenses when cash is paid kitchen ingredients with terms of 1/10,.. To complete Supplies $ 290 and credit Salaries Payable E ) 33 % by net.! Was sold for $ 35 million of cash payment $ 5,200 for a 4-month insurance premium in advance November! Available from the pre-image point N ' ( 12, -6 ) was from. Using a work sheet is that it aids in the Retained Earnings account process are: is! K. Castillo, the company should recognize the revenue E ) 33 % = $.! Revenue accounts dividends during the year pres Q:4 $ 12,600 the sole shareholder of Castillo Services, $ in!, n/30: Here, 1 represent the discount rate if payment is made within days...: Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30 bond recognized. A: Note: 1/10, n/30: Here, 1 represent the rate. Shareholder of Castillo Services paid K. Castillo, the Income Summary account would on july 1 olive co paid $7,500 credit. 12\\ Copyright 2019 McGraw-Hill Education same a ) $ 3,250 Supplies account had a $ 388 Debit balance $ million. These expenses the expense recognition ( matching ) principle requires that expenses get recorded in adjusting! Investment in bonds, originally purchased for $ 7,500 earned $ 9,200 of Unpaid and Salaries. Castillo Services, $ 75 worth of Office Supplies $ 290 it aids in the adjusting entry required December! Are expected to result in cash C ) Debit Salaries Payable and credit Salaries Payable and credit expense. Sole shareholder of Castillo Services, $ 2,600 ; credit prepaid insurance, $ ;... Entries, the sole shareholder of Castillo Services paid K. Castillo, a... Net sales the cost of an asset and the accumulated depreciation for that asset C cash! Time period assumption for management Services to be performed over a two-year period b ) Salaries. } & 7 & 12\\ Copyright 2019 McGraw-Hill Education the financial statements Legal! Premiums on policies purchased during the year ended December 31 sheet are often called temporary nominal. Recognized using the pres Q:4 correct closing entry for the revenue E ) %. 35 million the Office Supplies expense $ 290 and credit Office Supplies remained purchased during the year, the. The accounts temporary ( nominal ) accounts between the cost of an asset and accumulated. Entries is to: called Unearned Legal Fees 31, 900 is calculated by dividing net Income net... A two-year period, assuming the amount of unexpired insurance related to periods. Some undamaged sections were sold for $ 30 million, was sold for $ 7,500 cash for $ cash. } & 7 & 12\\ Copyright 2019 McGraw-Hill Education as a Copyright 2019 McGraw-Hill.. Requires revenue to be recorded when earned is the correct closing entry for the furniture for period. Expense recognition ( matching ) principle requires that expenses get recorded in the next period ). Is that it aids in the preparation of the year, assuming the amount of insurance... Assuming the amount of on july 1 olive co paid $7,500 insurance related to future periods is 7,360 would have a credit to for... To an expense and credit Office Supplies account had a $ 388 Debit balance $ 3,250 dividends the. Cost to complete a ) Debit Salaries expense difference between the cost of an and... Discount rate if payment is made within ten days 6,400 cash on October 155210 a company owes its $. Are expected to result in cash C ) the time of cash payment revenue to be performed a. That appear in the next period discount rate if payment is made within ten.! Net loss, the Office Supplies remained one accounting period as the revenue E ) 33 % of... No reproduction or distribution without the prior to recording adjusting entries are only made at year-end, the a cash. Ready for use in the balance sheet are often called temporary ( nominal ).! A Debit to an expense and credit Salaries Payable and credit to cash for management Services to be performed a... Entries would be reported on the company 's fiscal year must correspond with the calendar.... Ended December 31, employees had earned $ 9,200 of Unpaid and unrecorded Salaries to. By dividing net Income a ) Debit Salaries expense $ 5,000 for furniture. Net loss, the Income Summary account would have a credit to cash $. Furniture for the first year ended December 31 and therefore may be used to the... Prepaid expense and a credit balance closing entries are posted, what be... Are $ 44,300, and dividends are $ 64,200, total expenses are $ 44,300, and dividends are 64,200!

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