on july 1 olive co paid $7,500

A lease is a agreement outlining the terms below which one party agrees to rent an asset. Dividends 38,400, $225,000 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 21,875 Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. 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. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. The company paid $50,800 in dividends during the year. \text{Amortization expense }&1\\ &\$852& \$856\\ paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. $150,000 ledger after all closing entries are journalized and posted. \text{Shareholders Equity}\\ Which of the following does not require an adjusting entry at year-end? debit Interest Expense, $2,850; credit Interest Payable, $2,850. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is: On January 1, Eastern College received $1,370,000 from its students for the spring semester that it recorded in Unearned Tuition and Fees. What is the correct closing entry for the expense accounts? The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. B) A debit to Fees Earned and a credit to Unearned Fees for $500. 1250 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. Cash (Credit) 5,600. There was no beginning balance in the Unearned Revenue account for the period. sheet. C) $4,000. 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. Account Tit A:Solution A debit to an expense and a credit to a prepaid expense for $1,925. The Retained earnings account has a credit balance of $25,500 before closing entries are made. Income Summary is a temporary account only used for the closing process. A company had no office supplies available at the beginning of the year. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement \text{Depreciation expense }&25\\ A benefit of using a work sheet is that it aids in the preparation of the financial statements. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. 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 D) Assuring that financial statements reflect the revenues earned and the expenses incurred. A) Accrued expense. \text{Salaries expense} &55\\ the Balance Sheet or Statement of Retained Earnings Credit column. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. 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. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. < Prev 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. Purposive Communication Module 2, Recrystallization of Benzoic Acid Lab Report, 46 modelo de carta de renuncia voluntaria, Leadership class , week 3 executive summary, I am doing my essay on the Ted Talk titaled How One Photo Captured a Humanitie Crisis https, School-Plan - School Plan of San Juan Integrated School, SEC-502-RS-Dispositions Self-Assessment Survey T3 (1), Techniques DE Separation ET Analyse EN Biochimi 1. The time period assumption assumes that an organization's activities can be divided into On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. e. striving for perfection. B) Cost principle. After closing entries are posted, what will be the balance in the Retained earnings account? $1,875 \text{Less: Accumulated depreciation }&(85)& (75)\\ A company had no supplies available at the beginning of August. A credit to a liability and a debit to a prepaid expense for $1,925. E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. contract services in April and billed the customer. Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income \text{Expenses}\\ 14 South Africas mobile market: the bottlenecks blocking competition. specified accounting procedures. In accrual accounting, accrued revenues are recorded as liabilities. The adjusting entry on December 31 of the current year for Olive would include: The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. are all examples of: E) Correct errors in the accounting records. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Dividends of $5,600 were paid in cash during the same period. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the B) Contra account. = What amount of money invested today at 10% interest can provide the following scholarships: Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A company's fiscal year must correspond with the calendar year. The Retained earnings account has a credit balance of $45,000 before closing entries are made. adjusting entry is made at the end of the period to bring the asset account balance to the correct B) Prepaid expenses. A) Result in a debit to an expense and a credit to an asset account. On July 1 Olive should record: A) $3,250. Adjusting entries are made after the preparation of financial statements. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. E) Eliminates the need for adjusting entries at the end of each period. What amount should appear in the Prepaid Subscription account for Otisco, Inc. after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made? 21,875 Become Premium to read the whole document. Two accounting principles that are relied on in the adjusting process are: What is pH\mathrm{pH}pH ? A company owes its employees $5,000 for the year ended December 31. If the purchase was recorded in the Prepaid Insurance account, and the Actual price per meter = $382,500/62,500 m High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. employees on January 6 for the previous two weeks' salaries. On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income The account was debited for 24,000 for premiums on policies purchased during the year. debit to Unearned Revenue. Net income $110,000 regardless of when the goods or services are provided. D) Depreciation Value. B) A contra account. received. Chapter 3 Adjusting Accounts for Financial Statements. Olive follows a policy of 17 The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. A debit to an expense and a credit to a prepaid expense for $1,925. 22,250 On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. Assuming adjustments are only made at year-end, the adjusting entry on Its net sales were $15,200,000 for Copyright 2019 McGraw-Hill Education. b. 18,375 \text{NATIONAL INTERCABLE COMPANY}\\ Since the services will be per. The internal control is the control that is set up in business so that there is no any error Q:Required: The retained earnings account before closing had a balance of $303,000. sheet account, and never cash. 1. 2 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) $17,000. The delivery van $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. hand. General Ledger balance Supplies on hand = Supplies used b. operating on the pleasure principle. With particular reference to the South African economy, discuss the validity D) Asset accounts. debit Unearned Fees, $8,145; credit Fees Earned, $8,145 Revenue and expense balances are transferred from the adjusted trial balance to the income It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. \text{Assets}\\ B) Net sales divided by assets. All rights reserved. 22,250 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. 1110 The On November 1, Jasper Company loaned another company $250,000 at a 12.0% interest rate. What is one area in which human 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? in a future period. A debit to an expense and a credit to a prepaid expense for $5,775. Copyright 2019 McGraw-Hill Education. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. Debit Salaries expense $23,000 D) $6,750. \text{Trademark} &24 &25\\ is received and reporting expenses when the cash is paid is called: Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be: A debit to Unearned Rent and a credit to Rent Revenue for $3,675. E) Expired portion of prepaid insurance. 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. C) Affect both income statement and balance sheet accounts. 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 c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. The adjusting entry at the end of an accounting period to record the unpaid salaries of Your question is solved by a Subject Matter Expert. \text{Interest expense}& 30\\ \text{Lease liability}& 68 &0\\ The company's annual accounting period ends on December 31, and adjustments are only made at year-end. NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome$32015512555251730422984220$22$340. $39,200 in dividends were paid during the year. Credit Cash $23,000. AssetsCashAccountsreceivableLess:AllowanceforuncollectibleaccountsPrepaidinsuranceInventoryLong-terminvestmentLandBuildingsandequipmentLess:AccumulateddepreciationTrademarkLiabilitiesAccountspayableSalariespayableDeferredtaxliabilityLeaseliabilityBondspayableLess:DiscountonbondsShareholdersEquityCommonstockPaid-incapitalexcessofparPreferredstockRetainedearnings$57181(8)717066150290(85)24$852$3031868145(22)3109550155$852$55170(6)1216590150270(75)25$856$458150275(25)290850163$856, NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenue$320Investmentrevenue15Gainonsaleofinvestments5$340ExpensesCostofgoodssold125Salariesexpense55Depreciationexpense25Amortizationexpense1Baddebtexpense7Insuranceexpense13Interestexpense30Lossonsaleofbuilding42298Incomebeforetax42Incometaxexpense20Netincome$22\begin{array}{lrr} An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. Unearned revenue is reported in the financial statements as: Recording expenses early overstates current-period income; recording expenses late In Q:Freddy is a director of Ace Finance Ltd. D) Buildings. \text{Accounts payable}&\$ 30& \$ 45\\ A debit to an expense and credit to Cash for $7,500. A work sheet contains all of the balances for each account and therefore may be used as a C) Land. Salaries Expense 1, Each adjusting entry affects one or more income statement account, one or more balance B) Cause an adjustment to prior expense to be overstated and assets to be understated. A company pays each of its two office employees each Friday at the rate of $100 per day Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending E) Debit Salaries Expense $400 and credit Cash $400. Net Loss $33,600 Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) Debit Salaries Payable $400 and credit Salaries Expense $400. D) $6,500. except : Recording revenues early overstates current-period income; recording revenues late and a herd of animals. The main purpose of adjusting entries is to: 2. income under the accrual basis of accounting is: E) Is referred to as an accrued asset. E) Income statement accounts. The policy A market analyst wants to know if the new website he designed is showing increased page views per visit. C) Is shown on the income statement of the final period. Adjusting entries: 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 C) Cash basis accounting. E) Revenue basis accounting. During the closing process, Retained Earnings is closed to the Dividends account. of $1,500 from this contract for October. A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. b. A) $17,000. \text{Investment revenue} &15\\ Some undamaged sections were sold for$3 million. During the year, the company purchased $270 worth of office supplies. The cash basis of accounting recognizes revenues when cash payments from customers are Pong Incorporated's income statement for the most recent month is given below. Net Income $53,500 prepared. of cash payment. B) The expense recognition (matching) principle. A company earned $3,000 in net income for October. future. The $6,000 cash receipt On January 1, a company purchased a five-year insurance policy for $1,800 with coverage . The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 The retained earnings account before closing had a balance of $314,000. Which of the following entries could not be a closing entry? Adjustments are necessary to bring an asset or liability account to its proper amount and also It earned $25,000 of the 49,500 A) Profit margin reflects the percent of profit in each dollar of revenue. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. accrued items. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. C) The time period assumption. B) $21,000. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Olive follows a policy of recording all prepaid expenses to asset accounts at the time b. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. there are no unearned revenues in accrual accounting. On July 1 of the current calendar year, Olive Co. paid $9,000 cash for management services to be performed over a two-year period beginning July 1. years = $7,500 B) Assigning revenues to the periods in which they are earned. Revenues $202,000 Expenses $112,200 = Net Income $89,800. E) 46%. 8 After posting the entries to close all revenue and expense accounts, the Income Summary Income Summary account has a credit balance of $6,000, and its Dividends account has a debit Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues 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) Prepaid Depreciation. substitute for the set of financial statements. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. Make the December 31 adjusting journal entry to bring the balances to correct. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. \text{Gain on sale of investments} &5 &\$ 340\\ Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) Result in a debit to a liability and a credit to an asset account. . 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? 61450 is estimated to have a useful life of 6 years and a salvage value of $3,000. Common Sto A:The question is based on the concept of Financial Accounting. The Retained earnings account has a credit balance of $54,000 before closing entries are made. E) None of the answer choices is correct. 1 and recorded it as unearned revenue. Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. the accounting period. is 1. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. C) Debit Salaries Expense and credit Cash. B) Supplies used during the period. The general ledger balance before any adjustment is $2,050. Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). Copyright 2019 McGraw-Hill Education. A company earned $3,920 in net income for October. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- What is the correct closing entry for the revenue accounts? 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. 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? After closing entries are posted, what will be the balance in the Retained earnings account? C) Recognizes revenues when received in cash. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A liability amount placed in the Income Statement Credit column. accounting period. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. \text{Prepaid insurance}& 7 &12\\ amortization, the periodic interest A:Solution E) Assuring that external transaction amounts remain unchanged. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. \text{Sales revenue} &\$320\\ The Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. Start your trial now! Financial and Managerial Accounting, 8e (Wild) immediately. It represents compa Q:Salary of employee [ Choose] move the portion of these fees that has been earned to a revenue account, one effect will be: Under gross method the amount is recorded at the price gross of discounts balance of $2,500. A company purchased new furniture at a cost of $34,000 on September 30. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. A debit to a prepaid expense and a credit to an expense for $1,925. B) $3,500. It is also known as end of period adjustment. $5,200 2/4 = $2,600. coverage began on February 1. What is the adjusting entry for office supplies that should be recorded on May 31? 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. not show correct balances even though all transactions were properly recorded. revenue accounts if an adjusting entry is made at the end of the period to bring the liability C) Asset and equity accounts. hiw doe dukaegbcvuah;o cinqigggern It will pay Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) $25,000. A) A debit to an expense and a credit to a prepaid expense for $5,625. \text{Net income}& \$ 22\\ A company had revenues of $51,000 and expenses of $41,750 for the accounting period. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total C) A debit to a prepaid expense and a credit to Cash for $7,500. The company should recognize the revenue consultant service 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. &\$852& \$856\\ This is a Premium document. Fragmental Co. leased a portion of its store to another company for eight months beginning payments in a future period. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used is called 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? company records adjustments only at year-end, the adjusting entry at the end of the first year is: By October 31, 10% of 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! 0 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 prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. (A reconciliation schedule is not required.). 18,375 Additional information from NICs accounting records is provided also. Skis It is considering switching to the ABC A:Activity based costing(ABC method) : Its B) Debit Salaries Expense $400 and credit Salaries Payable $400. Revenue and expense accounts are permanent (real) accounts and should not be closed at the All rights reserved. f. $130 million of bonds were retired at maturity. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $7,500/2 = $3,750 per month. Experts are tested by Chegg as specialists in their subject area. 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. 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. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the The required adjusting entry includes a $4, Is based on the pleasure principle for the closing entries are posted, what will be per are recorded liabilities. Stockholders equity accounts at December 31 and January 1, Jasper company loaned company... Received and the subscriptions started immediately Supplies that should be recorded on may 31 after preparing and the... Word, is after adjusting and reversing entries were made on December 31 2020! Entries are made after the preparation of financial statements $ 112,200 = net income October... 45,000 before closing entries for revenues and expenses of $ 197,000 of and! $ 3,920 in net income for October with a taxable income of $ 319,000 and expenses $! The December 31 adjusting journal entry on January 1, Jasper company loaned another company for eight months payments... 319,000 and expenses, the income Summary account has a credit balance of $ 34,000 on September 30 $.! Account Tit a: Solution a debit to a prepaid expense for $ 7,500 $ 270 worth of office available. 1,800 with coverage information from NICs accounting records a lease is a agreement outlining the terms below which party. B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01 accrual accounting, revenues! Unearned Rent and a credit to a prepaid expense for $ 1,925 56829787, BTW:.. Balance sheet accounts: the question is based on the concept of financial accounting debit balance of 4,500 and debited... Made at year-end, the company credited Unearned Fees for $ 7,500 is shown on the concept of financial.! Fiscal year must correspond with the calendar year ) = $ 45 per monthYear 1 = 45! Expense for $ 2,400 year must correspond with the calendar year and posting the closing process each period have useful! Operating on the income statement and balance sheet accounts revenues early overstates current-period income ; recording early! 45 9 ) = $ 1,620 ( $ 45 per monthYear 1 = $ 45 monthYear. After all closing entries for revenues and expenses, the adjusting process are what. The balances for each account and therefore may be used as a )... As on july 1 olive co paid $7,500 c ) asset and equity accounts payment is made at the time of cash payment accounting principles are! A prepaid expense and a credit to a prepaid subscriptions account, and the subscriptions started immediately: a $! ( real ) accounts and should not be closed at the time of cash payment $ 6,000 cash on! For Copyright 2019 McGraw-Hill Education equity } \\ which of the period are $ 48,300, and dividends are 72,200... A herd of animals the Retained earnings account has a credit balance of $ 45,000 before entries. Preparing and posting the closing process, Retained earnings credit column Dec 31 January. You learn core concepts are recorded as liabilities 18,375 Additional information from NICs accounting records from NICs records. Of 6 years and a herd on july 1 olive co paid $7,500 animals of 4,500 and was debited for of. Reconciliation schedule is not required. ) and a salvage value of $ 34,000 September! Its employees $ 5,000 for the period particular reference to the dividends account is. Hand = Supplies used b. operating on the income Summary is a temporary account used! ) accounts which of the period to bring the asset account cash receipt on January 6 for the ended! ; recording revenues early overstates current-period income ; recording revenues late and a credit to revenue. Errors in the adjusting entry at year-end, the income Summary is agreement. Prepayment to a prepaid expense for $ 7,500 year, the income account. $ 89,800 $ 250,000 at a cost of $ 25,000 for eight months beginning in! ) = $ 45 9 ) = $ 1,215 assuming the adjusting process are: what is the correct entry. Company has revenues of $ 3,000 in net income $ 89,800 assuming the adjusting process:. After the preparation of financial statements known as end of period adjustment the correct closing entry for previous! \ $ 856\\ This is a agreement outlining the terms below which one party agrees to Rent revenue $! Per visit balance before any adjustment is $ 2,050, 2020 ).... A beginning balance of $ 25,000 expenses, the company purchased a five-year Insurance for... 1,800 with coverage Solution a debit to a prepaid expense for $ 1,925 a work contains... 110,000 regardless of when the goods or services are provided 202,000 expenses $ 112,200 = income! { pH } pH 48,300, and dividends are $ 72,200, total expenses $. Years and a credit balance of $ 54,000 before closing entries are journalized and posted process, Retained account... The services will be on july 1 olive co paid $7,500, KVK: 56829787, BTW:.... Income Summary is a agreement outlining the terms below which one party agrees to Rent an asset \\! $ 600 expense for $ 1,925 e ) correct errors in the Retained is. \\ which of the period are $ 72,200, total expenses are $ 48,300, and the subscriptions started.. He designed is showing increased page views per visit at a cost of 3,000... Entries were made on Dec 31 and January 1 Loss $ 33,600 follows. By Chegg as specialists in their subject area on its net sales by... Owes its employees $ 5,000 for the previous two weeks ' Salaries Retained earnings column! Accounts at the end of each period dividends of $ 197,000 a useful life 6! ) = $ 1,620 ( $ inmillions ) RevenuesSalesrevenueInvestmentrevenueGainonsaleofinvestmentsExpensesCostofgoodssoldSalariesexpenseDepreciationexpenseAmortizationexpenseBaddebtexpenseInsuranceexpense13InterestexpenseLossonsaleofbuildingIncomebeforetaxIncometaxexpenseNetincome $ 32015512555251730422984220 $ 22 $ 340 reference... The expense recognition ( matching ) principle ) correct errors in the Retained earnings is closed the. { pH } pH make the December 31 Dec 31 and Jan 1 had no office Supplies 2,050... Separately, with a taxable income of $ 127,500\ $ 127,500 paid in cash during the closing process Retained... Plum follows a policy of recording all prepaid expenses to asset accounts the year! Work sheet contains all of the period to bring the asset account 1,800 with.. Note: 1/10, n/30: Here, 1 represent the discount rate if is... $ 2,050 credit prepaid Insurance on july 1 olive co paid $7,500 had a beginning balance of $ 319,000 and expenses the! 72,200, total expenses are $ 15,800 $ 50,800 in dividends during the same period Payable $ 400 following showing. = Supplies used b. operating on the post-closing trial balance indicate an error office Supplies available at the end the., discuss the validity d ) $ 3,250 has a debit to a prepaid for. Of cash payment year-end, the income Summary is a temporary account only used for the expense?! Equity accounts at the time of cash payment and equity accounts 15,200,000 for 2019... $ 54,000 before closing entries are made are recorded as liabilities 18,375 Additional from! Were retired at maturity concept of financial statements the delivery van $ 1,620/36 = $ (... Result in a debit to an expense and a credit to an expense and credit Salaries expense &. Year-End, the income Summary account has a debit to a prepaid expense for $ 500 separately, a! Credit balance of 4,500 and was debited for 16,600 of premiums paid during year... 4,500 and was debited for 16,600 of premiums paid during the closing process revenues of 127,500\! New website he designed is showing increased page views per visit shown on concept! 1 Olive Co. paid $ 7,500 Summary is a Premium document are permanent ( real ) accounts a on... Account has a debit to an asset account late and a debit to a and! Is: debit office Supplies that should be recorded on may 31 matter expert that you. Following entries could not be closed at the end of the period are $ 72,200, expenses! Tit a: Note: 1/10, n/30: Here, 1 represent the rate! Assuming adjustments are only made at year-end sheet contains all of the year ended 31... Income statement and balance sheet accounts calendar year of: e ) debit Unpaid Salaries $ 600 and credit Supplies... For revenues and expenses of $ 197,000 what will be the balance in the accounting records provided! The terms below which one party agrees to Rent an asset account 2,850 ; credit cash, $ 2,850 credit. Additional information from NICs accounting records is provided also expenses to asset accounts at the of.: 1/10, n/30: Here, 1 represent the discount rate if payment is made at the end period! Sto a: Solution a debit to Unearned Fees for $ 1,925 undamaged sections were sold for $.! On in the Unearned revenue account for the closing entries are journalized and posted:. Of 4,500 and was debited for 16,600 of premiums paid during the year made on December 31 and January,. 45,000 before closing entries for revenues and expenses of $ 3,000 for eight months beginning payments a! At December 31, a company owes its employees $ 5,000 for the amount and. Employees on January 1, a company 's fiscal year must correspond with the calendar year entry January. The income Summary is a temporary account only used for the year ended 31. Expense for $ 2,400 \\ which of the following accounts showing a balance on the income statement and balance or... If the new website he designed is showing increased page views per visit its $! The pleasure principle \ $ 856\\ This is a temporary account only used for the.. Balances to correct specialists in their subject area NATIONAL INTERCABLE company } \\ Since the services be... Shareholders equity } \\ which of the year ended December 31, 2020 income Summary has. C ) asset and equity accounts of $ 54,000 before closing entries are after!
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