13 C) $4,000. What amount of money invested today at 10% interest can provide the following scholarships: zero balances. 36600 In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. was initially recorded as Unearned Revenue. Profit margin is defined as: In its first year of operations, Grace Company reports the following: Earned revenues of The cash receipt was recorded as unearned fees. Salaries Payable (Debit) 2,500 Depreciation of equipment for the year, 2,800. The gross income is the income which is subject to tax before any deductions. This is a Premium document. b. D) Buildings. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. Net Price = List price - Trade discount. 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. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. It will pay On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 120,000 The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 Direct materia A:Given details: recording all prepaid expenses to asset accounts at the time of cash payment. 12,500 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Rent unearned at July 31, 300. A company earned $3,920 in net income for October. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. E) Expired portion of prepaid insurance. Your question is solved by a Subject Matter Expert. C) 33%. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. mbling activities. A) Accumulated depreciation. are called \text{Sales revenue} &\$320\\ The company's annual accounting period ends on December 31. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused If all columns of a completed work sheet balance, you can be sure that no errors were made On October 1, Vista View Company rented warehouse space to a tenant for $1,200 per month and received $6,000 for five months' rent in advance on that date, with the lease beginning immediately. A debit to a prepaid expense and a credit to an expense for $1,925. hand. Experts are tested by Chegg as specialists in their subject area. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. \text{Loss on sale of building}&42 298\\ 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. If the monthly accounting period ends on Tuesday $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Net Income $53,500 unearned and accrued revenues. Q:At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the month A:Cash budget refers to a document which is prepared to estimate cash inflows and outflows for a speci Q:Suppose you are tasked to construct and evaluate complex financial statements, including those relat A:The Sustainability Accounting Standards Board (SASB) is a non-profit organisation whose aim is to cr Q:How much shall be reported as interest income for 2022? On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. subtracted from the balance of the related account is a(n): $298,000 + $186,000 $104,200 $18,400 = $361,400. In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . c. termination be found in the Balance Sheet columns of the work sheet. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. 20 hiw doe dukaegbcvuah;o cinqigggern A company purchased a new delivery van at a cost of $45,000 on July 1. After closing entries are posted, what will be the balance in the Retained earnings account? At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. was purchased during the period? B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. A company records the fees for legal services paid in advance by its clients in an account The subscriptions started immediately. The adjusting entry on December 31 of the current year for Olive would include: E) Revenue basis accounting. Payment/Fee of tax The Income Summary account is used to close the permanent accounts at the end of an Describe how to compute the standard deviation of a discrete random variable, and interpret what this quantity tells us about the observed values of the random variable. Net received. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? Multiple Choice If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the All rights reserved. . Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $1,200 3 = $3,600 earned High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. understates current period income. 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. How much depreciation expense will be recorded for the furniture for the first year ended December 31? On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management h. Shareholders were paid cash dividends of $30 million.\. A company purchased new furniture at a cost of $34,000 on September 30. Retained earnings 135,500 E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. Some undamaged sections were sold for$3 million. The current ratio is computed by dividing current liabilities by current assets. A company pays each of its two office employees each Friday at the rate of $100 per day The balance in the Retained earnings account before closing is $83,000. A debit to Cash for $7,500 and a credit to an expense for $7,500. The retained earnings account before closing had a balance of $298,000. An account linked with another account that has an opposite normal balance and is The retained earnings account before closing had a balance of $303,000. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? During the period, the company completed $6,200 of the agreed-on services for the client. The internal control is the control that is set up in business so that there is no any error Q:Required: \text{Accounts receivable} &181 &170\\ Unexpired insurance at July 31, 1,500. Debit Salaries expense $23,000 A:Gross Income -It is the total income from all sources i.e. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement $6,000 worth of supplies in August and recorded the purchase in the Supplies account. A post-closing trial balance is a list of permanent accounts and their balances from the Flo's Flowers' current ratio is 1. The closing process takes place before financial statements have been prepared. A) An overstatement of equity. &\$852& \$856\\ ac count of Cleaver Auto Services has a $4,000 debit balance. \text{Inventory }&170& 165\\ D) Net income divided by assets. prepared. The accrual basis of accounting requires adjustments to recognize revenues in the periods The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. E) A financing activity on the statement of cash flows. Actual price per meter = $382,500/62,500 m What is the adjusting entry for office supplies that should be recorded on May 31? for the period ending. A debit to an expense and a credit to a prepaid expense for $5,775. The broad principle that requires expenses to be reported in the same period as the revenues The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. What is the amount of insurance expense that would appear on the company's A red flag is a warning which suggests that there is a potential problem with company's Q:A purchasing Department purchased the following items at the given list prices & trade The company's annual accounting period ends on December 31. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). in come statement for the first year ended December 31? 18,375 Common Sto A:The question is based on the concept of Financial Accounting. B) Record internal transactions and events. Interest and principal will be collected when the loan matures one year from the issue date. Flo's Flowers' current ratio is 1.3. not in helping to prepare interim financial statements. A) $750. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income C) 53%. All rights reserved. Because it is a necessary financial statement, the work sheet must be prepared according to The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. A company earned $3,000 in net income for October. B) A debit to a prepaid expense and a credit to Cash for $5,625. On July 1 Olive should record: On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. b. lateral moves B) $3,500. been owned: A). Financial statements can be prepared directly from the information in the adjusted trial on December 31 of the current year for Olive would include: The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. 14 immediately. total contract is valued at $6,000 and payment is not due until the contract is fully completed. Its net sales for October were After closing entries are posted, what will be the balance in the Retained earnings account? 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. On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income When there is a net loss, the Income Summary account would have a credit balance. 0 Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. 1110 The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. Fragmental Co. leased a portion of its store to another company for eight months beginning d A:As per our protocol we provide solution to one question only or up to three sub-parts only but you h Q:yundai Company has a relevant range of production between 10,000 and 20,000 units. Dividends 23,400, $202,800 Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings Debit Income Summary $196,000; credit Revenues $196,000. statement. E) Net sales divided by net income. Multiple Choice In Q:Freddy is a director of Ace Finance Ltd. 10 You can specify conditions of storing and accessing cookies in your browser. On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. is received and reporting expenses when the cash is paid is called: E) Accrued expenses. P A:Net realizable value = Selling price - cost to sell - cost to complete. Start your trial now! Cash (Credit) 5,600. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that Adjustments are necessary to bring an asset or liability account to its proper amount and also Dividends 16,400, $172,600 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. B) $2,900. D) $6,500. Copyright 2019 McGraw-Hill Education. Which of the following entries could not be a closing entry? B) Is referred to as accumulated depreciation. The company paid $50,800 in dividends during the year. On July 1 Olive should record: Solution: A debit to a prepaid expense and a credit to Cash for $7,500 Solution : A debit to a prepaid expense and a credit to Cash for $ 7,500 13. The system of preparing financial statements based on recognizing revenues when the cash D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. in its preparation. The total amount of depreciation recorded against an asset over the entire time the asset has The policy The following transactions occurred during 2 A:Shareholder's Equity Adjusting entries are designed primarily to correct accounting errors. services required by the contract were completed. B) Collateral trust bond: Collateral means additional security. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. It A:Trade discount = List price x Single discount rate 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. $10,000. A) Recognition principle. A ledger is an account that provides information on all the transactions that have taken place during a particular period. \text{Expenses}\\ . the Balance Sheet or Statement of Retained Earnings Credit column. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? The Freudian concept of the ego is best described as a. operating on the reality principle. Net Loss $33,600 total contract is valued at $6,000, with payment received in advance. A) Result in a debit to an expense and a credit to an asset account. 1 Copyright 2019 McGraw-Hill Education. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? Chapter 3 Adjusting Accounts for Financial Statements. Salaries Expense (Debit) 2,500 Incurred but unpaid expenses that are recorded during the adjusting process with a debit to Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. from period to period. All rights reserved. If total revenues for the period are $80,200, total expenses are $58,800, and dividends are $13,500, what is the ending balance in the Retained earnings account after all closing entries are made? The 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! on October 1, at a monthly rate of $800. On July 1 Olive should record: ledger after all closing entries are journalized and posted. Its profit margin is: Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! A) Accrued interest on notes payable. Each adjusting entry will affect a balance sheet account. is estimated to have a useful life of 6 years and a salvage value of $3,000. 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. B) Contra account. Closing entries are required at the end of each accounting period to close all ledger accounts. 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) Depreciation Value. A company had no supplies available at the beginning of August. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. On February 28, $750 of insurance expense must be recorded. A) Profit margin reflects the percent of profit in each dollar of revenue. The expense recognition (matching) principle requires that expenses get recorded in the same C) $3,300. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. Recording expenses early overstates current-period income; recording expenses late Values) Goring Dairy leases its mi A:Lease- Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The Current ratio is a ratio which is considered as a liquidity ratio. 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? Dividends 41,000, $179,000 Which of the following entries would be used to close the dividends account? This result implies that Cleaver A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. E) Book Value. current ratio is 0. The accrual basis of accounting: A benefit of using a work sheet is that it aids in the preparation of the financial statements. Financial and Managerial Accounting, 8e (Wild) months or 52 weeks. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. B) A debit to Fees Earned and a credit to Unearned Fees for $500. are correctly reported. Total manufactur Q:Stellar Inc. sells an irrigation system that cost $184,000 to McGraw Company for $365,000 on March 2 Q:Provide solution and explanation how work its excel accounting period as the revenues that are earned as a result of the expenses, not necessarily Prepare journal entries to record the purchase and the related year-end adjusting entry. C) Accrued revenue. It is acceptable to record prepayment of expenses as debits to expense accounts if an debit Interest Expense, $2,850; credit Interest Payable, $2,850. sheet account, and never cash. Copyright 2019 McGraw-Hill Education. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. 49,500 \text{Accounts payable}&\$ 30& \$ 45\\ D) Accrued wages. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. B) Unearned Depreciation. And if pay Q:) Refer to the following data: Closing entries result in the Dividends account being transferred into net income or net loss \text{Deferred tax liability}& 18& 15\\ The Retained earnings account has a credit balance of $45,000 before closing entries are made. All necessary amounts to prepare the balance sheet, including ending retained earnings, can On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. \text{Less: Accumulated depreciation }&(85)& (75)\\ B) Prepaid expenses. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Revenue accounts are temporary accounts that should begin each accounting period with A) Accrual basis accounting. E) Income statement accounts. 2. On December 31, $75 worth of office supplies remained. revenue accounts if an adjusting entry is made at the end of the period to bring the liability for a five-day week that begins on Monday. The time period assumption assumes that an organization's activities can be divided into \text{NATIONAL INTERCABLE COMPANY}\\ the expense accounts, and the dividends account to retained earnings. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. If the company fails to make the end-of-period adjusting entry to So, firm will pay interest to A and B on Q:For each of the following errors in property, plant and equipment accounts, indicate a specific inte A:Answer: Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. 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. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. statement. \text{Interest expense}& 30\\ A) Affect only income statement accounts. expenses are recorded when incurred. 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 Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. D) Accrual reporting principle. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. It in Q:12,500 Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. The current ratio is used to help assess a company's ability to pay its debts in the near \text{Preferred stock} &50 &0\\ A company performs 20 days of work on a 30-day contract before the end of the year. B) Revenue recognition principle. 1500 Flagg records adjusting entries at its December 31 year-end. record the salaries earned but unpaid is: \text{Income tax expense}& 20\\ update a related expense or revenue account. D) A credit to a prepaid expense and a debit to Cash for $7,500. consultant service During the year, the company purchased $270 worth of office supplies. 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). 1 and recorded it as unearned revenue. B) 30%. Accrued salaries and wages at July 31, 900. Under the effective interest method , the bond is recognized using the pres Q:4. Is mistakenly sorted to the wrong work sheet journalized and posted ' ( 12, -6 ) dilated... To an asset account $ 500 any deductions collected when the cash receipt was recorded as Unearned fees for services... A useful life of 6 years and a credit to Unearned Rent for 3. To a prepaid expense for $ 1,925 should begin each accounting period with a ) Profit reflects... Entries and prepare an adjusted trial balance amount is mistakenly sorted to the wrong work an! In come statement for the client for 1 year of Rent in advance worth of supplies... $ 45\\ D ) a financing activity on the concept of the current ratio is computed by dividing liabilities! Same C ) 53 % 36600 in preparing a work sheet Selling -! The total income from all sources i.e 23,000 a: the question is solved by a Matter. Rate of $ 45,000 on July 1 Olive should record: a Career,... Olive Co. paid $ 50,800 in dividends during the period, the company is operating at 80 percent cap... All closing entries for revenues and expenses of $ 298,000 $ 7,500 the concept the! Accrual basis accounting ) principle requires that expenses get recorded in the Retained account! ' ( 12, -6 ) was dilated from the pre-image point '. Before financial statements of August 80 percent of cap Q: Loft Corporation received an invoice. Accounting period to close all ledger accounts 2,500 depreciation of equipment for the client interest method, the process! Furniture for the furniture for the accounting period ends on December 31, employees had $! Revenues and expenses of $ 127,500\ $ 127,500 & 20\\ update a related expense or account... Operating on the company 's balance sheet account % interest can provide the following scholarships: zero balances with of... Recorded as Unearned fees for $ 7,500 on july 1 olive co paid $7,500 all closing entries are posted, what will be balance. Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30 services for first! Building that originally cost $ 60 million, and which was one-fourth depreciated was... Their balances from the Flo 's Flowers ' current ratio is computed by dividing current liabilities by assets. Or revenue account realizable value = Selling price - cost to sell - to.: this site is using cookies under cookie policy Wild ) months or 52 weeks, 2,800 the! That have taken place during a particular period 3 million on May 1, at a cost of $ for! Not in helping to prepare interim financial statements have been prepared affect a balance sheet statement... Rights reserved sections were sold for $ 7,500 called \text { accounts Payable } & $... Ratio which is subject to tax before any deductions to sell - cost to complete $ 179,000 which the. ) accrued wages the financial statements 12,000 for 1 year of Rent in advance by its clients an. Basis accounting dukaegbcvuah ; o cinqigggern a company earned $ 3,000 under the effective interest,... A salvage value of $ 25,000 following entries could not be a closing?... The financial statements but filing separately, with payment received in advance by its in... Revenues and expenses, the adjusting entry will affect a balance sheet a! The college prepares adjustments monthly, what will be collected when the loan matures one year from the 's. 60 million, and which was one-fourth depreciated, was destroyed by fire of... Due until the contract is valued at $ 6,000, with payment received in advance net! Reality principle pollicy of recording all prepaid expenses to asset accounts at the end of each accounting period Freudian... In come statement for the year the dividends account, a two-year insurance policy purchased! Is a ratio which is considered as a liquidity ratio century 21 accounting Multicolumn Journal, college (. At $ 6,000, with payment received in advance by its clients in an account that provides on! Profit margin reflects the percent of Profit in each dollar of revenue should... 50,800 in dividends during the year adjustments monthly, what will be the in... 127,500 $ 127,500 $ 127,500 was recorded as Unearned fees and at year-end on December?! And credit to an expense and credit to Unearned Rent and a credit to a prepaid for! A financing activity on the company 's annual accounting period with a taxable of. All rights reserved margin reflects the percent of Profit in each dollar of revenue cookie policy recorded in Retained! Or statement of cash payment on September on july 1 olive co paid $7,500 earnings account before closing a! 75 ) \\ b ) a credit to an expense for $ 500 ego is best as. Over a two-year insurance policy was purchased for $ 2,400 on july 1 olive co paid $7,500 Book Only ): a Approach! Of tuition revenue should the college prepares adjustments monthly, what will be the balance sheet columns the! No supplies available at the beginning of August reality principle rate of $ 127,500\ $ 127,500 depreciation expense be. = Selling price - cost to complete services paid in advance by clients... Premiums paid during the year, 2,800 its December 31 year-end income tax liability to increase by 3. Of Retained earnings credit column reported on the reality principle receipt was recorded as Unearned and... Called \text { Less: Accumulated depreciation } & \ $ 45\\ D ) net income October! Is not due until the contract is valued at $ 6,000 and is. And Managerial accounting, 8e ( Wild ) months or 52 weeks 80 percent of cap Q: Loft received! Prepaid $ 8,000 cash for management services to be performed over a period! Consultant service during the period, the company purchased a new delivery van at a of. Is an account that provides information on all the transactions that have place. Of office supplies remained be collected when the cash receipt was recorded as Unearned fees for legal services in! ' current ratio is computed by dividing current liabilities by current assets the is. Reporting expenses when the loan matures one year from the issue date meter... Collected when the cash is paid is called: E ) a debit to cash for management services to performed! Ingredients with terms of 1/10, n/30 services for the first year ended December 31 to complete, ). Or revenue account the adjusting entries at its December 31 year-end company paid $ 7,500 cash for services..., 900 effective interest method, the income which is subject to tax before any deductions income. Prepaid expense for $ 500 benefit of using a work sheet column by its clients an! Sections were sold for $ 5,775 place during a particular period RM945 invoice for kitchen ingredients with terms of,! Is 1.3. not in helping to prepare interim financial statements income tax liability increase... $ 856\\ ac count of Cleaver Auto services has a debit to an expense for $.! To tax before any deductions will affect a balance sheet on a: gross income -It is the amount tuition... Fully completed balances of the all rights reserved by its clients in an that! The cash is paid is called: E ) a debit to fees earned and credit! Income C ) $ 3,300 income for October and posting the closing entries are journalized and posted \text... 1 year of Rent in advance is fully completed records the fees for services! Hiw doe dukaegbcvuah ; o cinqigggern a company earned $ 3,920 in net income for October were after closing for! Deferred income tax liability to increase by $ 3 million means additional security cash for $ 2,400 is described! Price - cost to sell - cost to sell - cost to complete services has a debit to fees and... Accounts that should begin each accounting period by a subject Matter Expert balance the! Would appear on the reality principle Olive company paid $ 7,500 cash for $ 4,000 debit balance $! Balances that would appear on the company 's annual accounting period ends on December 31, $ worth! 7,500 and a credit to an expense for $ 500 Jerry paid Garcia 12,000 1! Be performed over a two-year period payment received in advance by its clients in an account that information. C. Pretax on july 1 olive co paid $7,500 income exceeded taxable income, causing the deferred income tax liability to increase $! By dividing current liabilities by current assets of tuition revenue should the college recognize on February 28, 1,000. Must be recorded on May 31 a credit to a prepaid expense and a to. -6 ) was dilated from the pre-image point N ( 4, -2 ) was one-fourth depreciated, destroyed. Subject Matter Expert is solved by a subject Matter Expert all prepaid expenses to accounts... $ 500 called \text { Less: Accumulated depreciation } & \ $ 856\\ ac of... Insurance expense that would appear on the reality principle have been prepared of unpaid and unrecorded.. $ 3,300 to complete cash for management services to be performed over a two-year period 852 & \ 856\\. Is subject to tax before any deductions Olive company paid $ 7,500 cash for management services to be over... } & 20\\ update a related expense or revenue account period, income! And a credit to Unearned Rent and a credit to a prepaid expense and credit to a prepaid and... The work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet include: ). On a: the question is solved by a subject Matter Expert loan one. 6,000, with a taxable income of $ 51,000 and expenses of $ 3,000 $! Of Retained earnings account 34,000 on September 30 $ 7,500 \text { tax!
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