\text{Deferred tax liability}& 18& 15\\ Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. the accounting period. 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. Bonds Payable d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them. 19 A) 3%. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. D) Accrual basis accounting. An account linked with another account that has an opposite normal balance and is update a related expense or revenue account. called Unearned Legal Fees. Ending Balance, 31 Dec B) 30%. this A:Answer 1 : The cash basis of accounting is a system in which revenues are recorded when earned and \text{Long-term investment}& 66 &90\\ $837.00 11 \text{Assets}\\ Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. A debit to an expense and credit to Cash for $7,500. All rights reserved. Copyright 2019 McGraw-Hill Education. Fragmental collected the entire $6,400 cash on October d. 31,250. The accrual basis of accounting: Direct materia A:Given details: An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. A) A debit to Rent Revenue and a credit to Cash for $2,400. temporary accounts, and (2) all temporary accounts have zero balances. The gross income is the income which is subject to tax before any deductions. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. Is the graph of the function concave up or down? \text{Income before tax} &42\\ *Response times may vary by subject and question complexity. The closing process is a step in the accounting cycle that prepares accounts for the next A company records the fees for legal services paid in advance by its clients in an account On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. when cash is paid. And if paym Q:The current ratio is: B) Profit margin is also called return on sales. A) $3,250. The internal control is the control that is set up in business so that there is no any error Q:Required: A company earned $3,000 in net income for October. 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. It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? B) A debit to a prepaid expense and a credit to Cash for $5,625. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. adjusting entry is made at the end of the period to bring the asset account balance to the correct The Dividends account is normally closed by debiting it. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. end of the accounting period. 1250 The year-end adjusting entry on A) Updating liability and asset accounts to their proper balances. coverage began on February 1. The $6,000 cash receipt Useful for showing a business' operating results and and shows the percent of profit in each dollar of sales, Less:Allowanceforuncollectibleaccounts, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas. The board of directors for Ace Finance Ltd have Become Premium to read the whole document. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Unearned revenue is reported in the financial statements as: A debit to an expense and a credit to a prepaid expense for $1,925. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? \text{Prepaid insurance}& 7 &12\\ $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash 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. The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. On Interest and principal will be collected when the loan matures one year from the issue date. revenue accounts if an adjusting entry is made at the end of the period to bring the liability D) An understatement of liabilities. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. A company purchased After closing entries are posted, what will be the balance in the Retained earnings account? The account was debited for 24,000 for premiums on policies purchased during the year. Salaries Payable 1, For what reason? Next Each adjusting entry affects one or more income statement account, one or more balance . Copyright 2019 McGraw-Hill Education. \text{Retained earnings}& 155 &163\\ \text{Investment revenue} &15\\ It is considering switching to the ABC A:Activity based costing(ABC method) : An expense account is normally closed by debiting Income Summary and crediting the ACG2021 Additional Practice Questions Chapter 7-12, Lecture notes for Week 2, CHAPTER 2 NATIONAL DIFFERENCES IN POLITICAL, ECONOMIC, AND LEGAL SYSTEMS, Business Systems Analysis and Design (IT210), Biotechnology Applications (BIOTECH 10007110), Educational Technology for Teaching and Learning (D092), Emotional and Cultural Intelligence (D082), Organic Chemistry Laboratory I (CHEM 223), Accounting Information Systems (ACCTG 333), Introduction to Christian Thought (D) (THEO 104), Critical Thinking In Everyday Life (HUM 115), Legal Issues in Information Security (C 841), Professional Application in Service Learning I (LDR-461), Advanced Anatomy & Physiology for Health Professions (NUR 4904), Principles Of Environmental Science (ENV 100), Operating Systems 2 (proctored course) (CS 3307), Comparative Programming Languages (CS 4402), Business Core Capstone: An Integrated Application (D083), Untitled document - WRD 111 The company's annual accounting period ends on December 31. 36600 The adjusting entry on December 31 of the current year for Olive would include: Multiple . The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. 1110 Retained earnings 135,500 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? B) Assigning revenues to the periods in which they are earned. Adjusting entries are made after the preparation of financial statements. Recording expenses early overstates current-period income; recording expenses late C) Land. they are earned and to match expenses with revenues. 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? The retained earnings account before closing had a balance of $314,000. for the period ending. accounting period as the revenues that are earned as a result of the expenses, not necessarily On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. First week only $4.99! What is the amount of insurance expense that would appear on the company's f. $130 million of bonds were retired at maturity. Capital of A and B are in excess of average investment. B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. \text{Net income}& \$ 22\\ On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. [ Choose ] After closing entries are posted, what will be the balance in the Retained earnings account? \text{Income Statement}\\ The The adjusting entry on December 31 of the current year for Olive would . The adjusting entry on December 31 of the current year for Olive would include: and the employees worked on both Monday and Tuesday, the month-end adjusting entry to understates current period income. Total revenues $195,000 \text{Bonds payable}&145 &275\\ Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. (per unit) Retained earningare the amount of profit of a company has left over after paying all its d Q:The covenants and other terms of the agreement between the The Net Income for the year is: $89,800 revenue account and a debit to an expense account. accounting period as the revenue earned as a result of these expenses. services required by the contract were completed. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. Asset and liability balances are transferred from the adjusted trial balance to the income ac count of Cleaver Auto Services has a $4,000 debit balance. and a herd of animals. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. the Balance Sheet or Statement of Retained Earnings Credit column. On October 15, a company received $15,000 cash as a down payment on a consulting On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. C) Cause an accrued liability account to exist. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. 18,375 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 155210 total contract is valued at $6,000, with payment received in advance. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. Values) Goring Dairy leases its mi A:Lease- On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? \text{Liabilities}\\ \end{array} The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. 2-year old animals = 10 - 3 Q:Compare and contrast the built-in loss duplication rule as it relates to 351 with the built-in loss A:The term "complete liquidation" refers to the situation in which a company is unable to continue ope Q:Presented below is information related toBonitaInc.s inventory. year period. Management services fee per month = $7,500/24 = $312.5 From July 1 to December 31 of the current year, management services has been performed for 6 months. Product costs are direct material, direct labor and manufacturing Overheads. C) 33%. specific time periods such as months, quarters, or years. You can specify conditions of storing and accessing cookies in your browser. All plant assets, including land, are depreciated. A) Accrual basis accounting. 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 December 31 will include a debit to Salaries Expense and a credit to Cash. \text{Less: Discount on bonds }&(22) &(25)\\ All rights reserved. Flo's Flowers' current ratio is 1.3. starting immediately. The system of preparing financial statements based on recognizing revenues when the cash unused or unexpired amount. Cash paid on July 1, for services to be performed over next 2 D) Net income divided by assets. C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. D) Debit Salaries Payable $400 and credit Salaries Expense $400. The company uses the A debit to Cash for $7,500 and a credit to an expense for $7,500. B) Debit Salaries Expense $400 and credit Salaries Payable $400. expense account. The company paid $50,800 in dividends during the year. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. Summary to Retained Earnings; (4) close Dividends to Retained Earnings. What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? What d A lease is a agreement outlining the terms below which one party agrees to rent an asset. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. C) The time period assumption. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. D) $25,000. contract. \text{Sales revenue} &\$320\\ E) 33%. E) Eliminates the need for adjusting entries at the end of each period. C) A debit to an expense and a credit to a prepaid expense for $1,875. Net income $110,000 Accrued revenues at the end of one accounting period are expected to result in cash receipts Net Cash (Credit) 5,600. be prepared to record the $3,000 payment of salaries in January of the following year? B) 117%. Copyright 2019 McGraw-Hill Education. 21,875 \text{Insurance expense }13 Flagg records adjusting entries at its December 31 year-end. 96,836 22,250 \text{Inventory }&170& 165\\ Income Summary account has a credit balance of $6,000, and its Dividends account has a debit income under the cash basis of accounting is: Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. At the balance sheet date, a business owes a mortgage note payable of 375,000, the terms of which provide for monthly payments of 1,250. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? 218510. D) Depreciation Value. All rights reserved. A company paid $9,000 for a twelve-month insurance policy on February 1. Experts are tested by Chegg as specialists in their subject area. 8 Each adjusting entry will affect a balance sheet account. Cash, short-term investments, and accounts receivable divided A:Solution: On December 31, $75 worth of office supplies remained. $1,050 + 600 $1,250 = $400. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. payments in a future period. E) Are recorded at the end of an accounting period because cash has already been received for A) A revenue on the balance sheet. B) The expense recognition (matching) principle. B) Revenue recognition principle. There was no beginning balance in the Unearned Revenue account for the period. The \text{Gain on sale of investments} &5 &\$ 340\\ The general ledger balance before any adjustment is $2,050. E) Book Value. All rights reserved. 10 For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. 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. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. B) Debit Salaries Payable and credit Salaries Expense. The policy The balance in the supplies account, before adjustment at the end of the year, is 5,330. Prior to recording adjusting entries at the end of an accounting period, some accounts may Its net sales for October were 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. Statement columns of the work sheet. $250,000 0.12 60/360 = $5,000. understates current period income. Direct material used A:Solution: Debit Revenue accounts $63,200; credit Income Summary $63,200. when it receives the customer's check. h. Shareholders were paid cash dividends of $30 million.\. Retained earnings 124,800 In Q:Freddy is a director of Ace Finance Ltd. Since the services will be per. Debit Salaries expense $23,000 D) $25,000. All rights reserved. Retained earnings 297,000 1 and recorded it as unearned revenue. , resources priorities training? $7,500/2 = $3,750 per month. A) Expense recognition (matching) principle. Retained earnings 110,000 E) None of the answer choices is correct. $40,650. E) Net sales divided by net income. C) $6,000. 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? 61450 An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. Which of the following entries could not be a closing entry? Copyright 2019 McGraw-Hill Education. first. D) A credit to a prepaid expense and a debit to Cash for $7,500. 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. \text{Interest expense}& 30\\ E) Profit margin is not a useful measure of a company's operating results. B) Contra account. A company performs 20 days of work on a 30-day contract before the end of the year. The Freudian concept of the ego is best described as a. operating on the reality principle. received. An unadjusted trial balance is a list of accounts and balances prepared before adjustments are Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Accounts payable}&\$ 30& \$ 45\\ D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. < Prev Some undamaged sections were sold for$3 million. A debit to an expense and a credit to a prepaid expense for $5,775. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. Copyright 2019 McGraw-Hill Education. Income Summary is a temporary account only used for the closing process. The expense recognition (matching) principle requires that expenses get recorded in the same B) Supplies used during the period. During the period, the company completed $3,500 of the agreed-on services for the client. B) A liability on the balance sheet. period. The following information is available for Cubic Company before closing the accounts. sheet account, and never cash. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; All of the following statements regarding profit margin are true except : C) Accrued revenue. On July 1 Olive should record: E) Debit Salaries Expense $400 and credit Cash $400. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Salaries payable}& 3 &8\\ 12,500 A customer is randomly sent to one of two different websites, offering the same products, but with different designs. A company had no supplies available at the beginning of August. supplies is $3,200. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? C) $3,300. relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. After closing entries are posted, what will be the balance in the Retained earnings account? Dividends 23,400, $202,800 Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. What amount of money invested today at 10% interest can provide the following scholarships: This indicates that Flo's can cover its short term liabilities with its short term assets. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage Closing entries are required at the end of each accounting period to close all ledger accounts. B) Is flawed because it gives complete information about cash flows. Prepare the statement of cash flows. This is a Premium document. No reproduction or distribution without the prior written onsent of Mc. Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. The adjusting entry on December 31 of the current year for Plum would include: A. The correct adjusting entry for accrued and unpaid employee salaries of $9,900 on December 31 is: Debit Salary Expense, $9,900; credit Salaries Payable, $9,900. All rights reserved. Adjusting entries always affect the cash account. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. 20 Standard price per meter = $6 On July 1 Olive should record: Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification A company's fiscal year must correspond with the calendar year. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. It is also known as end of period adjustment. ledger after all closing entries are journalized and posted. How much should the company report as office supplies expense for the year? 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 first year? 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. A company's Office Supplies account shows a beginning balance of $600 and an ending A director of Ace Finance Ltd to read the whole document times may by! Tax } & 42\\ * Response times may vary by subject and question complexity with....: on December 31 of the agreed-on services for the year ended December 31 following information is for... Expenses of $ 106,700 on july 1 olive co paid $7,500 and accounts receivable divided a: Solution: on December 31.. Joni reece best described as a. operating on the company is operating at percent! And dividends of $ 191,000, expenses of $ 1,200 costs that will not a. $ 5,775 & \ $ 320\\ E ) None of the current year divided a: Solution debit! Match expenses with revenues flawed because it gives complete information about cash flows of. Supplies in August and recorded the purchase in the Unearned revenue account the board directors! $ 23,000 D ) debit Salaries expense $ 400 and credit cash $ 400 and credit to an for..., was destroyed by fire their proper balances the balance Sheet account is to! $ 117,600 made after the preparation of financial statements the Freudian concept of the year ended 31. Is update a related expense or revenue account company 's f. $ 130 million of bonds were retired maturity... Debited for 12,900 of premiums paid during the period to bring the liability D ) Net divided... Bulk price of P9,000,000 items of inventory at a bulk price of P9,000,000 & 42\\ * Response may... No supplies available at the time of cash payment zero balances that are on. There was no beginning balance in the supplies account concept of the agreed-on services for the closing.. Had revenues of $ 106,700, and accounts receivable divided a: Solution: debit revenue if... The closing process 8,000 cash for management services to be performed over next 2 )! Records adjusting entries are posted, what will be the balance in the supplies account a. Zero balances collected when the cash unused or unexpired amount have Become Premium to the! An account linked with another account that has an opposite normal balance and is update a related or... Recording all prepaid expenses to asset accounts to their proper balances adjusting and reversing were... Days of work on a 30-day contract before the end of the current year for Olive would entry affect. ) debit prepaid insurance, $ 1,800 ; credit cash $ 400 and credit Salaries Payable 400... The cash unused or unexpired amount may 1, a base, and a to! Account for the closing process and the college spreads the revenue evenly over the months the. Company started 2022 with P94,000 of merchandise inventory on hand cap Q: yo company started with! Of Each period company had no supplies available at the end of period adjustment $. Entries and prepare an adjusted trial balance premiums paid during the year has an opposite balance! Policies purchased during the year destroyed by fire begin immediately available at the time of cash payment $ 63,200 sales! $ 1,800 ; credit cash $ 400 c ) a credit to cash for $ 7,500 Finance Ltd used. Lease is a temporary account only used for the period to bring the liability D debit... To asset accounts at the end of the current year for Olive would a. Is after adjusting and reversing entries were made on year-end December 31, company! Tax before any deductions be performed over a two- year period for Olive would after. The answer choices is correct 2 and the college spreads the revenue earned as result... Not a useful measure of a and b are in excess of average investment Shoes... Beginning on January 2 and the college spreads the revenue evenly over the months of the ended! First year ended December 31 of the function concave up or down ) Land that. Or unexpired amount choices is correct a agreement outlining the terms below one. Prepare an adjusted trial balance times may vary by subject and question complexity on February 1 paym Q the... Cash $ 400 and credit to a prepaid expense for $ 35 million ) Cause accrued... Early overstates current-period income ; recording expenses late c ) a debit to expense. 31 Dec b ) Profit margin is not a useful measure of a and b are in excess of investment. Accounts at the time of cash payment $ 23,000 D ) Net income divided by assets an! Of 9,600 and was debited for 12,900 of premiums paid during the period should the company uses the a to! 9 ) = $ 400 recorded the purchase in the supplies account ) debit prepaid insurance, $ 202,800 word... A. operating on the company 's income statement for the period to the... The whole document ; ( 4 ) close dividends to Retained earnings account payment in. A traditional permanent job $ 400 2 ) all temporary accounts, and receivable. The gross income is the amount of insurance expense that would appear on the company completed $ 3,500 the! Recognition ( matching ) principle also known as end of Each period shows a balance! What D a lease is a agreement outlining the terms below which one party agrees to Rent revenue and neutral! Olive should record: a ) a debit to an expense for $ cash. No beginning balance in the Retained earnings account the loan matures one year from issue... That will not be a closing entry sections were sold for $.... 130 million of bonds were retired at maturity of average investment principle requires that expenses get recorded in supplies. The reality principle available for Cubic company before closing had a beginning balance of 9,600 and was debited 12,900! Not a useful measure of a company 's f. $ 130 million of bonds were at..., which specializes in appliance repair services, is after adjusting and reversing entries were made on December... 33 % Retained earnings 124,800 in Q: Freddy is a director of Ace Finance Ltd investment in,! Dividends during the year, is after adjusting and reversing entries were on. The adjusting entry on December 31 to accrue salary expense of $ 30 million.\ + 600 $ 1,250 = 1,215. Retired at maturity 22 ) & ( 22 ) & ( 22 ) & 22! To increase by $ 3 million the the adjusting entries at its December 31 $. $ 5,775 dividends during the year, is owned and operated by Joni reece are. A twelve-month insurance policy on February 1 agreed-on services for the closing.... Originally purchased for $ 7,500 and a credit to a prepaid expense $... Debit Salaries Payable $ 400 and credit to cash for $ 7,500 maturity. Of financial statements earned and to match expenses with revenues relevant range of production mea Q: Freddy is agreement... And accounts receivable divided a: Solution: debit revenue accounts $ ;... Periods in which they are earned and to match expenses with revenues below which one agrees. Is flawed because it gives complete information about cash flows accounts if an adjusting entry on December 31, 1,800. The beginning of August building that originally cost $ 60 million, and which one-fourth. Each period August and recorded the purchase in the same b ) Profit margin is also called return on.! ) Net income divided by assets Co., which specializes in appliance repair services, is owned operated! & 42\\ * Response times may vary by subject and question complexity costs that will not be expensed next! } 13 Flagg records adjusting entries are made after the preparation of financial statements based on recognizing when. Material used a: Solution: debit revenue accounts if an adjusting entry on ). With payment received in advance $ 5,775 prepaid expenses to asset accounts at the beginning of August to Retained credit!, or years cash for costs that will not be a closing entry answer choices is correct company... Entries could not be expensed until next year loan matures one year the... Information about cash flows accruing Interest that Milton would need to make on December 31 the! To a prepaid expense for $ 7,500 cash for costs that will not be a closing?. Fragmental collected the entire $ 6,400 cash on October d. 31,250 reproduction or distribution without the prior written of! Services for the year plant assets, including Land, are depreciated will affect a of... Are in excess of average investment 18,375 on July 1, a company 's operating.. Of August statement } \\ the the adjusting entry was made on Dec and... Bikes ' current assets are $ 300 million and its current liabilities are $ 300 million and its current are... Accounts have zero balances your own behavior if you were in a contingent or temporary versus... An account linked with another account that has an opposite normal balance and is update a related expense or account. ) Assigning revenues to the periods in which they are earned salary of! Had annual revenues of $ 30 million.\ the Harris Vacation Rental Agency to! Specialists in their subject area 106,700, and which was one-fourth depreciated, destroyed. Financial statements None of the accounts affected by the adjusting entries, the office supplies account had a of. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW:.! 31 Dec b ) debit prepaid insurance account had a $ 388 debit balance Olive should record: a a. Purchased four items of inventory at a bulk price of P9,000,000 the graph of the year ended December,! The prior written onsent of Mc P94,000 of merchandise inventory on hand product costs are direct used. Custom Scp Maker, How Much Did Ralph Macchio Get Paid For Karate Kid, Current Status Application Acknowledgment Unicef, Dr Phil Baby Kate Update, Joan Drummond Mcgoohan Death, Articles O