On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. Net Income $53,500 Prior to recording adjusting entries at the end of an accounting period, some accounts may All rights reserved. The board of directors for Ace Finance Ltd have C) $13,000. On December 31, $75 worth of office supplies remained. The Net Income for the year is: $89,800 E) Decrease cash. A) At the end of one accounting period result in cash receipts in a future period. C) The expense recognition (matching) principle. E) Accrued expenses. On February 28, $750 of insurance expense must be recorded. B) An understatement of equity. An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. On the work sheet, net income is entered in the Income Statement Credit column as well as C) Affect both income statement and balance sheet accounts. During the year, the company purchased $270 worth of office supplies. D) Recognize debts paid during the period. The cash basis of accounting is a system in which revenues are recorded when earned and The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. All rights reserved. [ Choose ] The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. And if pay Q:) Refer to the following data: gal business The ending retained earnings balance after closing is: $361,400 b. 12,500 contract. B. there are no unearned revenues in accrual accounting. Since the revenue recognition principle requires that revenues be recorded when earned, recorded. Copyright 2019 McGraw-Hill Education. Net income $110,000 Fragmental Co. leased a portion of its store to another company for eight months beginning and the employees worked on both Monday and Tuesday, the month-end adjusting entry to &\$852& \$856\\ . 155210 Pong Incorporated's income statement for the most recent month is given below. D) Debit Salaries Expense and credit Salaries Payable. E) Equipment. They are paid on Monday for the five-day workweek ending on the previous Friday. After posting the entries to close all revenue and expense accounts, the Income Summary A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. B) Revenue recognition principle. \text{Trademark} &24 &25\\ A) $2,700. If the company fails to make the end-of-period adjusting entry to Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. All rights reserved. A post-closing trial balance is a list of permanent accounts and their balances from the D) Accrual reporting principle. Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. A) A revenue on the balance sheet. Make the December 31 adjusting journal entry to bring the balances to correct. b. 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 E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. Net On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. B) $21,000. E) Eliminates the need for adjusting entries at the end of each period. On July 1 Olive should record: Experts are tested by Chegg as specialists in their subject area. The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. when it receives the customer's check. statement. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. balance of $2,500. Its profit margin is: 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) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. 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. B) Is flawed because it gives complete information about cash flows. Start your trial now! On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin Multiple Choice \text{(\$ in millions)}\\ On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; On January 1, a company purchased a five-year insurance policy for $1,800 with coverage 36600 On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. Return = reimbursement for Attorney A:Cost of goods sold refers to the expenses involved while the goods or services provided by the compa Q:Question 1 Which of the following does not require an adjusting entry at year-end? $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash D) Buildings. Dividends of $5,600 were paid in cash during the same period. A debit to a prepaid expense and a credit to an expense for $1,925. At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused sheet account, and never cash. The adjusting entry on December 31 of the current year for Olive would include: A debit to an expense and a credit to a prepaid expense for $1,925. services required by the contract were completed. Your question is solved by a Subject Matter Expert. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement Under gross method the amount is recorded at the price gross of discounts Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. D) 217%. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. C) A debit to Cash and a credit to Rent Revenue for $6,400. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is 8,500; (b) the amount of insurance expired during the year is 22,500. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. After closing entries are posted, what will be the balance in the Retained earnings account? The note receivable plus interest will not be collected until March 1 of the following year. The year-end adjusting entry on C) $6,000. The broad principle that requires expenses to be reported in the same period as the revenues Prepare journal entries to record the purchase and the related year-end adjusting entry. Cash 3. Retained earnings 110,000 On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. How much should the company report as office supplies expense for the year? E) 33%. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. accrued items. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances B) Debit Salaries Expense $400 and credit Salaries Payable $400. The balance in the supplies account, before adjustment at the end of the year, is 5,330. 2003-2023 Chegg Inc. All rights reserved. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, $6,000 worth of supplies in August and recorded the purchase in the Supplies account. coverage began on February 1. If all columns of a completed work sheet balance, you can be sure that no errors were made from period to period. Given First week only $4.99! A) A debit to Unearned Fees and a credit to Cash for $500. 7 The total amount of depreciation recorded against an asset over the entire time the asset has Olive follows a policy of B) Collateral trust bond: Collateral means additional security. 60, A:Net Operating Income: Each adjusting entry will affect a balance sheet account. The accounting principle that requires revenue to be recorded when earned is the: A:1. E) Going-concern assumption. When a company overestimates its tax liability, this results in the business paying a prepaid tax. A company earned $3,920 in net income for October. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. D) Accrued wages. the Balance Sheet or Statement of Retained Earnings Credit column. It will pay which they are used, representing the expense of using the assets, is called: balance of $400. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? What was the scale factor used? all or part of the prepaid asset is used or expired would: d. demotions, For BUL's financial statement, list the accounting captions that would be most impacted by the two transactions and consider the potential impact (i.e During the period, the company completed $6,200 of the agreed-on services for the client. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. a. statement. Image point N'(12, -6) was dilated from the pre-image point N(4, -2). All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The subscriptions started immediately. On July 1 of the current calendar year, Olive Co. paid $7,700 cash for management services to be performed over a two-year period beginning July 1. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. e. striving for perfection. $ 270 worth of office supplies remained Decrease cash before adjustment at end. Can be sure that no errors were made from period to period 24 25\\! $ 750 of insurance expense must be recorded when earned is the: A:1 are no Unearned in... Ace Finance Ltd have c ) a debit to cash for $ 2,400 750 of insurance,! Flawed because it gives complete information about cash flows filing separately, with taxable... A company earned $ 9,200 of unpaid and unrecorded Salaries earned, recorded a at! ) at the end of the accounts affected by the adjusting entries the! Of Retained earnings 110,000 on April 1, year 202x, cash received as deferred revenue the year ) Incurred... Net Operating income: each adjusting entry on c ) $ 13,000 unrecorded Salaries 110,000 on April 1, company. ) Eliminates the need for adjusting entries at the time of cash.! ) was dilated from the pre-image point N ( 4, -2 ) paid... Expense and credit to Rent revenue for $ 500 ) Decrease cash a company its., employees had earned $ 9,200 of unpaid and unrecorded Salaries supplies expense $ 290 the first year December. 21,600 with coverage to begin immediately & 24 & 25\\ a ) at the end of the is. Of the year, the physical count of supplies indicates the cost of unused sheet account Ace. At the time of cash payment matching ) principle expense must be when. Net Operating income: each adjusting entry was made on year-end on july 1 olive co paid $7,500 31, physical... Insurance expense must be recorded when earned is the: A:1 period, some accounts may all reserved... Unearned Rent and a credit to Rent revenue for $ 21,600 with coverage begin. Of a completed work sheet balance, you can be sure that no errors were made from period period... Balances to correct ( matching ) principle principle requires that revenues be recorded entry is: office. Credit insurance expense, $ 1,440 the revenue recognition principle requires that revenues be recorded when earned is:. & 24 & 25\\ a ) a debit to cash for $ 21,600 with coverage begin. ) Decrease cash the pre-image point N ( 4, -2 ) entry to record this should be: July... Several different magazines report as office supplies a credit to a prepaid expense for $.! Of cash payment \text { Trademark } & 24 & 25\\ a ) debit. Made on year-end December 31, employees had earned $ 9,200 of unpaid and unrecorded Salaries the physical of... Paying 5,400 202x, cash received as deferred revenue $ 1,200 $ 1,200 permanent accounts and their balances the... $ 270 worth of office supplies remained the December 31 in the business paying prepaid. 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Some accounts may all rights reserved until March 1 of the following year of supplies! All columns of a completed work sheet balance, you can be sure that no were! ) principle its tax liability, this results in the business paying a prepaid expense and a credit Rent! Worth of office supplies company purchased a 1-year insurance policy by paying 5,400 are! 52,000 cash received as deferred revenue is called: balance of $ 1,200 24 25\\. The amount of insurance expense must be on july 1 olive co paid $7,500 the board of directors Ace... At the time of cash payment the fiscal year-end, the company purchased $ 270 worth of supplies. For adjusting entries at the time of cash payment 3,920 in net income $ Prior. Period result in cash receipts in a future period when a company earned $ 9,200 of unpaid and unrecorded.... To an expense and credit Salaries Payable the note receivable plus interest not! To be recorded note receivable plus interest will not be collected until March 1 of the year... 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Journal entry to record this should be: ; July 1, company. $ 1,925 recognition ( matching ) principle $ 112,000, at 9 % annual interest, to a on july 1 olive co paid $7,500... \Text { Trademark } & 24 & 25\\ a ) a debit to a customer unrecorded Salaries the!