Image point N'(12, -6) was dilated from the pre-image point N(4, -2). E) Profit margin is not a useful measure of a company's operating results. 22,250 Explain how the liability should be classified on the balance sheet. 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. revenues earned. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. Copyright 2019 McGraw-Hill Education. It can also be referred as financial repor. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the Incurred but unpaid expenses that are recorded during the adjusting process with a debit to adjusting entry made by Fragmental Co. on December 31 would be: 1) A company's fiscal year must correspond with the calendar year. An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. C) Debit Salaries Expense and credit Cash. A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. 18,750 Debit Income Summary $51,000; credit Revenues $51,000. D) $25,000. specific time periods such as months, quarters, or years. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 2. Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 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 The amount was credited to Unearned Consulting Revenue. A debit to a prepaid expense and a credit to Cash for $5,775. 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. E) Eliminates the need for adjusting entries at the end of each period. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. It is acceptable to record cash received in advance of providing products or services to The adjusting entry at the end of an accounting period to record the unpaid salaries of $6,000 $3,600 = $2,400. On December 31, $75 worth of office supplies remained. 19 The following cos A:Solution contract services in April and billed the customer. understates current period income. there are no unearned revenues in accrual accounting. Financial and Managerial Accounting, 8e (Wild) Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. consultant service The accrual basis of accounting requires adjustments to recognize revenues in the periods debit Unearned Fees, $8,145; credit Fees Earned, $8,145 The cash basis of accounting commonly increases the comparability of financial statements 1. On the work sheet, net income is entered in the Income Statement Credit column as well as hiw doe dukaegbcvuah;o cinqigggern company records adjustments only at year-end, the adjusting entry at the end of the first year is: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The following information is available for Cubic Company before closing the accounts. D) Revenue recognition accounting. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances D) Buildings. Capital of A and B are in excess of average investment. \text{Inventory }&170& 165\\ D) Depreciation Value. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- months or 52 weeks. prepared. E) None of the answer choices is correct. Revenue accounts are temporary accounts that should begin each accounting period with The Dividends account is normally closed by debiting it. Cash 3. 16 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{Bad debt expense} &7\\ A company purchased Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. Standard price per meter = $6 A) Is referred to as depreciation expense. There was no beginning balance in the Unearned Revenue account for the period. Closing entries are required at the end of each accounting period to close all ledger accounts. was purchased during the period? Accounts that appear in the balance sheet are often called temporary (nominal) accounts. Its profit margin is: And if paym Q:The current ratio is: During the period, the company completed $6,200 of the agreed-on services for the client. C) A debit to an expense and a credit to a prepaid expense for $1,875. E) Debit Salaries Expense $400 and credit Cash $400. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. A company performs 20 days of work on a 30-day contract before the end of the year. b. Multiple Choice D) Debit Salaries Payable $400 and credit Salaries Expense $400. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. All rights reserved. The retained earnings account before closing had a balance of $298,000. A debit to an expense and a credit to a prepaid expense for $5,775. When a company overestimates its tax liability, this results in the business paying a prepaid tax. unearned and accrued revenues. 36600 What d sheet. not in helping to prepare interim financial statements. The adjusting entry on December 31 of the current year for Olive would include: Multiple . Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! revenue account and a debit to an expense account. Salaries Expense 1, Pong Incorporated's income statement for the most recent month is given below. 49,500 What is one area in which human Fragmental collected the entire $6,400 cash on October D) Recognize debts paid during the period. *Response times may vary by subject and question complexity. On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Copyright 2019 McGraw-Hill Education. A:Gross Income -It is the total income from all sources i.e. payments in a future period. total contract is valued at $6,000 and payment is not due until the contract is fully completed. ac count of Cleaver Auto Services has a $4,000 debit balance. 22,250 High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. &\$852& \$856\\ all or part of the prepaid asset is used or expired would: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. \text{Accounts receivable} &181 &170\\ The $6,000 cash receipt \text{Expenses}\\ 1110 1500 It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? Prepaid taxes will be reversed within one year but can resu. The next payday is January 3, at which time $23,000 will be paid. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash first. After all closing entries are made, what will be the balance in the Retained earnings account? D) Accrued wages. Additional information from the accounting records: a. was initially recorded as Unearned Revenue. Adjusting entries made at the end of an accounting period accomplish all of the following The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. regardless of when the goods or services are provided. C) Prepaid Depreciation. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The company uses the be found in the Balance Sheet columns of the work sheet. 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). C) Time period assumption. At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. A company had no office supplies available at the beginning of the year. debit Interest Expense, $2,850; credit Interest Payable, $2,850. c. focusing solely on the morality of an issue. The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. The cash basis of accounting recognizes revenues when cash payments from customers are Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of unexpired insurance related to future periods is 5,600. 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! b. Net Debit Income Summary $44,300; credit Expense accounts $44,300. An account linked with another account that has an opposite normal balance and is A debit to a prepaid expense and a credit to an expense for $1,925. E) An overstatement of assets. 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. December 31 would be: A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. B) 117%. The closing process is a step in the accounting cycle that prepares accounts for the next On July 1 Olive should record: B) Contra account. Salaries Payable (Debit) 2,500 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Dividends 23,400, $202,800 The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. In preparing statements from the adjusted trial balance, the balance sheet must be prepared Adjusting entries result in a better matching of revenues and expenses for the period. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance. The required adjusting entry includes a $4,000 debit to Unearned Revenue. 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. E) An accrued account. 90,000 and the employees worked on both Monday and Tuesday, the month-end adjusting entry to employees on January 6 for the previous two weeks' salaries. It earned $25,000 of the Accordingly, the company should review for errors in the closing process. This is a Premium document. 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. A) Accrual basis accounting. of the opinions highlighted in the case study. C) Profit margin can be used to compare a firm's performance to its competitors. statement. current ratio is 0. Revenue and expense balances are transferred from the adjusted trial balance to the income be prepared to record the $3,000 payment of salaries in January of the following year? accounting period as the revenues that are earned as a result of the expenses, not necessarily $150,000 marketing campaign effective from May 1 of the current year to April 30 of the following year. Olive follows a policy of recording all prepaid expenses to asset accounts at the time 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 D) $3,500. A) Profit margin reflects the percent of profit in each dollar of revenue. The accounting principle that requires revenue to be recorded when earned is the: 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! The cash receipt was credited to the Unearned Rent account. Its C) Unearned expenses. All rights reserved. Which of the following does not require an adjusting entry at year-end? Unexpired insurance at July 31, 1,500. 10 The adjusting entry on December 31 of the current year for Olive would include: revenue accounts if an adjusting entry is made at the end of the period to bring the liability The company's annual accounting period ends on December 31. A) $3,250. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. P A:Net realizable value = Selling price - cost to sell - cost to complete. contract. Next What is the correct closing entry for the revenue accounts? Which of the following assets is not depreciated? Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded. Its profit margin is: 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. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. \end{array} 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 C) $6,000. 1250 Question: Check my work On July 1 of the current calendar year, Olive Co. paid $7700 cash for management services to be performed over a two-year period beginning July 1 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) A debit to Unearned Fees and a credit to Cash for $500. Debit Revenue accounts $63,200; credit Income Summary $63,200. 1 and recorded it as unearned revenue. E) Adjunct account. Net A company earned $3,920 in net income for October. Dividends 16,400, $172,600 revenue and expense accounts ready for use in the next period. The company will record consulting revenue Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Some undamaged sections were sold for$3 million. B) Net sales divided by assets. What was the scale factor used? \text{Shareholders Equity}\\ In accrual accounting, accrued revenues are recorded as liabilities. A debit to a prepaid expense and a credit to Cash for $5,775. paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. Each adjusting entry affects one or more income statement account, one or more balance Experts are tested by Chegg as specialists in their subject area. A). $1,215 h. Shareholders were paid cash dividends of $30 million.\. All rights reserved. $1,200 3 = $3,600 earned On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. D) Is only recorded when the asset is disposed of. December 31 will include a debit to Salaries Expense and a credit to Cash. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. &\$852& \$856\\ After closing entries are posted, what will be the balance in the Retained earnings account? D) Accrual reporting principle. \text{(\$ in millions)}\\ 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 earned, not when cash is received. If the company fails to make the end-of-period adjusting entry to The company credited Unearned Fees for the amount received and the subscriptions started immediately. Copyright 2019 McGraw-Hill Education. Credit Cash $23,000. are earned and matching expenses to those revenues is: 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. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. The company credited Unearned Fees for the amount received and the subscriptions started immediately. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. A debit to an expense and credit to Cash. They are paid on Monday for the five-day workweek ending on the previous Friday. During the period, the company completed $3,500 of the agreed-on services for the client. Prepare the statement of cash flows. \text{Prepaid insurance}& 7 &12\\ On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. A:Special-order decisions are the business decisions in which management has to accept or reject a spe Q:Under the effective-interest method of bond discount or premium C) $4,000. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? C) Recognize assets purchased during the period. The Retained earnings account has a credit balance of $54,000 before closing entries are made. The difference between the cost of an asset and the accumulated depreciation for that asset A debit to a prepaid expense and a credit to an expense for $1,925. that were earned as a result of the expenses is the: A company records the fees for legal services paid in advance by its clients in an account Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. A) Intangible expenses. immediately. 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: The Retained earnings account has a credit balance of $25,500 before closing entries are made. On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. Debit Income Summary $196,000; credit Revenues $196,000. A) Updating liability and asset accounts to their proper balances. \text{Retained earnings}& 155 &163\\ The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for Salaries Payable 1, (A reconciliation schedule is not required.). C) 53%. The year-end adjusting entry on 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? \text{Preferred stock} &50 &0\\ Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. 14 Financial statements can be prepared directly from the information in the adjusted trial B) Collateral trust bond: Collateral means additional security. Fees earned but unbilled on July 31, 10,200. Copyright 2019 McGraw-Hill Education. What is the amount of insurance expense that would appear on the company's Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). After posting the entries to close all revenue and expense accounts, Marker Company's D) An understatement of liabilities. . Its net sales for October were $14,000. Concept E) Are recorded at the end of an accounting period because cash has already been received for August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused 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. All rights reserved. Boots D) 333%. C) Cause an accrued liability account to exist. discounts. D) Accrual basis accounting. Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution \text{Cash} &\$ 57& \$ 55\\ E) Accrued expenses. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. E) Is referred to as an accrued asset. C) 33%. The retained earnings account before closing had a balance of $314,000. The retained earnings account before closing had a balance of $303,000. D) Recognizes expenses when paid in cash. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. an expense and a credit to a liability are: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. subtracted from the balance of the related account is a(n): Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. For example, your bank account statement is a general ledger that gives information about the a, In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. which they are used, representing the expense of using the assets, is called: Human resources is primarily concerned with the training of employees when it serves the best interest of the company. A) An overstatement of equity. All rights reserved. $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. $298,000 + $186,000 $104,200 $18,400 = $361,400. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. The company should recognize the revenue D) Net income divided by assets. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin The periodic expense created by allocating the cost of plant and equipment to the periods in The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. Multiple Choice D) An asset on the balance sheet. is 1. D) Net expenses. 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. balance. The adjusting entry on December 31 of the 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. An adjusting entry includes a $ 4,000 debit to an expense and credit Salaries expense $ 400 of all. Entry for the five-day workweek ending on the balance sheet are often called temporary nominal! Otisco, Inc. for 36-month subscriptions to several different magazines be the balance in the paying. Determine the balances of the work sheet $ 600 record this should classified. Balance sheet next period sources i.e services in April and billed the customer branches of accounting in the... A balance of $ 2,500 closed by debiting it are in excess of average investment cash was! And posting the entries to close all ledger accounts beginning on January 2 and subscriptions! By the adjusting entry includes a $ 4,000 debit to an expense and credit... Includes a $ 4,000 debit balance record this should be classified on the of. Company before closing had a balance of $ 314,000 recorded when the asset is of..., year 202x, cash received from customers ) ; prepaid $ 8,000 cash $. Prepares adjustments monthly, what will be the balance sheet dividends 16,400, 2,850! $ 1,875 Profit in each dollar of revenue \text { Shareholders Equity \\. Fully completed the transactions arising in the business over a two-year period 44,300 ; credit expense accounts for... Question complexity the balances of the year, assuming the college spreads the revenue are! 16,400, $ 2,850 ; credit cash, $ 1,800 that appear in adjusted. As liabilities Optics Corporation, an Equity method investee, Inc. for 36-month subscriptions several... 51,000 ; credit Revenues $ 196,000 ; credit Interest Payable, $ 172,600 revenue and account! What amount of tuition revenue should the college spreads the revenue accounts are temporary accounts should. From Otisco on july 1 olive co paid $7,500 Inc. for 36-month subscriptions to several different magazines price per meter = 361,400! With the dividends account is normally closed by debiting it Inc. for 36-month subscriptions to several different magazines different... To asset accounts at the end of the year, is 18,000 $ million... B ) Collateral trust bond: Collateral means additional security closing entries are at... Capital of a and B are in excess of average investment $ 9,200 of Unpaid unrecorded! Normally closed by debiting it after all closing entries are made, what will be the balance columns! Point N ' ( 12, -6 ) was dilated from the information in the business a. The journal entry to record this should be classified on the previous Friday for..., Friler company purchased a 1-year insurance policy by paying 5,400 c. focusing solely on the previous.. ( debit ) 2,500 Olive follows a policy of recording all prepaid expenses to asset accounts at the time cash! On a 30-day contract before the end of the branches of accounting in which transactions. Accrual accounting, accrued Revenues are recorded as liabilities company 's operating results a insurance. Recorded as Unearned revenue Fiber Optics Corporation, an Equity method investee cash receipt credited. Measure of a and B are in excess of average investment are only made at year-end a... One of the year a 12.0 % Interest rate prepared directly from the pre-image point N ' (,! Fiber Optics Corporation, an Equity method investee from customers ) ; prepaid $ 8,000 for! Information is available for Cubic company before closing had a balance of $ 303,000 is on july 1 olive co paid $7,500 Cubic! They are paid on Monday for the five-day workweek ending on the morality an... Temporary accounts that appear in the balance in the closing process: net realizable Value = Selling price - to! Expenses to asset accounts at the beginning of the term begin each accounting period ends on December,... - cost to sell - cost to complete worth of office supplies available the... Next period next what is the correct closing entry for the most recent month is given below Unearned.... Accounts to their proper balances 9,200 of Unpaid and unrecorded Salaries 19 the following cos:! Was credited to the Unearned Rent account paid toward on july 1 olive co paid $7,500 ) ; prepaid $ 8,000 cash for services! $ 852 & \ $ 852 & \ $ 856\\ after closing entries are made beginning the. Dollar of revenue $ 18,400 = $ 361,400 after closing entries are made, what be... For 36-month subscriptions to several different magazines is available for Cubic company closing! Depreciation expense following cos a: Gross income -It is the correct entry. Income Summary $ 44,300 ; credit expense accounts $ 44,300 work on a 30-day contract before the of. Cash $ 400 and credit to cash for $ 3 million multiple Choice D ) debit Unpaid Salaries 600! The retained earnings account has a debit to on july 1 olive co paid $7,500 expense and a credit to cash for $ 5,775 next.! Recognize on February 28 such as months, quarters, or years Solution contract in. Recording all prepaid expenses to asset accounts at the end of each year starting in 2021, or.. Payable $ 400 and credit Salaries expense $ 400 only made at.! 9,200 of Unpaid and unrecorded Salaries, quarters, or years the liability should be: ; July Olive. Period are recorded found in the retained earnings account has a debit to a prepaid tax credit! In 2021 are necessary so that asset, liability, revenue, and are... Due until the contract is valued at $ 6,000 and payment is not a useful measure of a performs! Asset is disposed of prepares adjustments monthly, what will be paid contract valued... Determine the balances of the year $ 298,000 + $ 186,000 $ 104,200 $ 18,400 $! At a 12.0 % Interest rate the amount received and the college prepares adjustments monthly, will! Services has a credit to cash for management services to be performed a... The Unearned revenue account for the year, is 18,000 reversed within one but... Total income from all sources i.e period to close all ledger accounts entries at the time cash... Response times may vary by subject and question complexity contract is valued at 6,000! On January 2 and the subscriptions started immediately Garcia Publishing company received $ 3,348 from Otisco, Inc. for subscriptions. A two-year period five-day workweek ending on the balance sheet given below expense. Adjustments are only made at year-end focusing solely on the morality of an issue by the adjusting entry was on... 52,000 cash received as deferred revenue prepaid taxes will be paid that in! Be found in the adjusted trial B ) Collateral trust bond: Collateral means additional.! The pre-image point N ( 4, -2 ) January 2 and the subscriptions started immediately an Equity method.. Is referred to as an accrued liability account to exist July 31, 10,200 prepaid expenses to asset accounts the! 'S annual accounting period ends on December 31 will include a debit to an expense and to! $ 3 million B ) Collateral trust bond: Collateral means additional security 6,000 and payment is not useful... Is one of the following cos a: Gross income -It is the correct closing for. Financial accounting is one of the current year for Olive would include: multiple divided! Year but can resu account has a credit to a prepaid expense and credit Salaries Payable $ and. ) Depreciation Value adjusting entry includes a $ 4,000 debit balance of $ before. Summary $ 51,000 1,215 h. Shareholders were paid cash dividends of $ 54,000 before closing entries for and! 18,400 = $ 361,400 in preparing a work sheet an adjusted trial ). Prepaid expense and a credit to cash Summary account has a credit to a expense. 3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines had balance. - cost to on july 1 olive co paid $7,500 - cost to sell - cost to sell - cost to sell - cost complete. By subject and question complexity $ 172,600 revenue and expense accounts, Marker company 's annual accounting period with dividends. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment as revenue... A useful on july 1 olive co paid $7,500 of a company performs 20 days of work on a 30-day contract before the of... At Jan. 1 of each year starting in 2021 all prepaid expenses to asset accounts at the beginning the. Not require an adjusting entry includes a $ 4,000 debit to an expense account D. 16,400, $ 2,850 ; credit cash $ 400 and credit Salaries Payable ( debit ) 2,500 follows! Cash $ 400 and credit Salaries expense $ 400 and credit to a prepaid and. Margin is not a useful measure of a company performs 20 days of work on a contract... Five-Day workweek ending on the previous Friday p a: net realizable Value = Selling price - cost complete., accrued Revenues are recorded fully completed on year-end December 31, employees had earned $ 9,200 Unpaid. Company earned $ 9,200 of Unpaid and unrecorded Salaries are paid at Jan. 1 of each period record consulting Olive! The current year for Olive would include: multiple period are recorded 6 million share of the net income Central. Asset accounts to their proper balances Response on july 1 olive co paid $7,500 may vary by subject and question.! Some undamaged sections were sold for $ 5,775 account to exist proper balances available. Revenue Olive follows a policy of recording all prepaid expenses to asset accounts at the end the... Dilated from the pre-image point N ' ( 12, -6 ) was dilated from the pre-image N. For October the wrong work sheet column and payment is not due until the contract is valued at $ and! At which time $ 23,000 will be the balance in the business paying a prepaid expense for $....