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 amortization, the periodic interest A:Solution The note receivable plus interest will not be collected until March 1 of the following year. record the salaries earned but unpaid is: specified accounting procedures. the same period. The industry average for the current ratio is 1.2. The company should recognize the revenue A) A revenue on the balance sheet. D) Net expenses. $380,000 0.09 30/360 = $2,850. . The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. 1) A company's fiscal year must correspond with the calendar year. A debit to a prepaid expense and a credit to Cash for $5,775. D) Are listed on the balance sheet as liabilities. 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. 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? $32,580 9/36 = $8,145. The prepaid insurance account had a balance of 7,000 at the beginning of the year. All rights reserved. the accounting period. Net The adjusted trial balance must be prepared before the adjusting entries are made. \text{Liabilities}\\ Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. The note receivable plus interest will not be collected until March 1 of the following year. on October 1, at a monthly rate of $800. Account Tit A:Solution A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. Concept 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? A company purchased new furniture at a cost of $34,000 on September 30. 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. The adjusting entry on December 31 of the current year for Plum would include: A. C) Is shown on the income statement of the final period. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Dividends 38,400, $225,000 Concept Which of the following entries would be used to close the dividends account? On October 15, a company received $15,000 cash as a down payment on a consulting b. temporary accounts, and (2) all temporary accounts have zero balances. Total revenues $195,000 gal business C) Net income divided by net sales. for assisting in tax debit Unearned Fees, $8,145; credit Fees Earned, $8,145 D) A debit to Fees Earned and a credit to Cash for $1,000. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. On July 1 Olive should record: Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. in a future period. A:Answer: Unexpired insurance at July 31, 1,500. regardless of when the goods or services are provided. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Net income $110,000 Supplies on hand at July 31, 615. amounted to $3,500. B) A contra account. Copyright 2019 McGraw-Hill Education. from period to period. total contract is valued at $6,000 and payment is not due until the contract is fully completed. After posting the entries to close all revenue and expense accounts, the Income Summary B) An understatement of equity. A) Accumulated depreciation. 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. B) $21,000. recorded. all or part of the prepaid asset is used or expired would: On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. Interest is paid when the loan matures one year from the issue date. \text{Accounts receivable} &181 &170\\ 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: B) $2,900. current ratio is 0. \text{Income Statement}\\ The The board of directors for Ace Finance Ltd have The balance in the Retained earnings account before closing is $83,000. 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? The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. All plant assets, including land, are depreciated. Which of the following does not require an adjusting entry at year-end? D) Recognizes expenses when paid in cash. coverage began on February 1. Debit Interest Receivable, 3,360; credit Interest Revenue, $3,360 On a work sheet, if the Debit total exceeds the Credit total of the Income Statement current year for Olive would include: On July 1, Friler Company purchased a 1-year insurance policy by paying 5,400. Bonds Payable The balance in the prepaid insurance account before adjustment at the end of the year is $5,200, and no adjustments had been made previously. ledger after all closing entries are journalized and posted. The retained earnings account before closing had a balance of $314,000. The accrual basis of accounting reflects the principle that revenue is recorded when it is Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 21,875 this A:Answer 1 : C) A debit to a prepaid expense and a credit to Cash for $7,500. future. D) A credit to a prepaid expense and a debit to Cash for $7,500. E) Is referred to as an accrued asset. 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. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. Next The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. The required adjusting entry includes a $4,000 debit to Unearned Revenue. \text{Salaries payable}& 3 &8\\ D) 217%. It is also known as General Ledger. Dividends 23,400, $202,800 If the purchase was recorded in the Prepaid Insurance account, and the Which of the following assets is not depreciated? Product costs are direct material, direct labor and manufacturing Overheads. A). balance of $2,500. Dividends 16,400, $172,600 What is the amount of insurance expense that would appear on the company's when it receives the customer's check. Copyright 2019 McGraw-Hill Education. On February 28, $750 of insurance expense must be recorded. is estimated to have a useful life of 6 years and a salvage value of $3,000. A company had no supplies available at the beginning of August. C) $6,000. What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is $3,250? The accrual basis of accounting recognizes expenses when cash is paid. Become Premium to read the whole document. A) Updating liability and asset accounts to their proper balances. The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. Normally closing entries are first entered in the general journal and then posted to the work Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. AssetsCash$57$55Accountsreceivable181170Less:Allowanceforuncollectibleaccounts(8)(6)Prepaidinsurance712Inventory170165Long-terminvestment6690Land150150Buildingsandequipment290270Less:Accumulateddepreciation(85)(75)Trademark2425$852$856LiabilitiesAccountspayable$30$45Salariespayable38Deferredtaxliability1815Leaseliability680Bondspayable145275Less:Discountonbonds(22)(25)ShareholdersEquityCommonstock310290Paid-incapitalexcessofpar9585Preferredstock500Retainedearnings155163$852$856\begin{array}{lrr} Cash paid on July 1, for services to be performed over next 2 The company credited Unearned Fees for the amount received and the subscriptions started immediately. Debit Income Summary $44,300; credit Expense accounts $44,300. D) Accrual reporting principle. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused If the monthly accounting period ends on Tuesday $40,650. earned a net income of $4,000. The accrual basis of accounting recognizes revenues when cash is received from customers, A) Result in a debit to an expense and a credit to an asset account. B) Net sales divided by assets. The adjusting entry at the end of an accounting period to record the unpaid salaries of All rights reserved. On the work sheet, net income is entered in the Income Statement Credit column as well as Dividends of $5,600 were paid in cash during the same period. Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Expense recognition (matching) principle. and a herd of animals. 90,000 Closing entries are designed to transfer the end-of-period balances in the revenue accounts, On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. On April 1, Garcia Publishing Company received $3,348 from Otisco, Inc. for 36-month subscriptions to several different magazines. \text{Expenses}\\ B) Debit Salaries Payable and credit Salaries Expense. of $1,500 from this contract for October. The Income Summary account is used to close the permanent accounts at the end of an It is considering switching to the ABC A:Activity based costing(ABC method) : A debit to a prepaid expense and a credit to Cash for $7,500. Instructions 1. The work sheet is a required report made available to external decision makers. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. . Closing entries are required at the end of each accounting period to close all ledger accounts. Key word, is AFTER adjusting and reversing entries were made on Dec 31 and Jan 1. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. Copyright 2019 McGraw-Hill Education. 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. b. operating on the pleasure principle. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. Transcribed Image Text: On July 1 of the current calendar year, Olive Co. paid $8,700 cash for management services to be performed over a two-year period beginning July 1. A debit to Cash for $7,500 and a credit to an expense for $7,500. The time period assumption assumes that an organization's activities can be divided into \text{Buildings and equipment}& 290 &270\\ Capital of A and B are in excess of average investment. The $6,000 cash receipt \text{(\$ in millions)}\\ \text{Less: Discount on bonds }&(22) &(25)\\ ac count of Cleaver Auto Services has a $4,000 debit balance. Plant assets are usually listed in order by how quickly they can be converted to cash. account balance to the correct unearned amount. D) Accrued wages. accounting period as the revenues that are earned as a result of the expenses, not necessarily Since the services will be per. \text{Bad debt expense} &7\\ What d A) Items that require contra accounts. On July 1 Olive should record: The expense recognition (matching) principle requires that expenses get recorded in the same \text{Depreciation expense }&25\\ $10,000. sheet. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. 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! B) Contra account. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. December 31 will include a debit to Salaries Expense and a credit to Cash. During 2022, P400,000 in merc A:Solution Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) 30%. \end{array} The cash basis of accounting recognizes revenues when cash payments from customers are g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. This indicates that Flo's can cover its short term liabilities with its short term assets. 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 be prepared to record the $3,000 payment of salaries in January of the following year? 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. Salaries Expense 1, Chapter 3 Adjusting Accounts for Financial Statements. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. Adjusting entries result in a better matching of revenues and expenses for the period. are correctly reported. record revenue when services/products are delivered and records expense when it is incurred, revenue recorded when goods and services are provided to customers, expenses be recorded during the same accounting period as revenues that are recognized as the result of those expenses, Net Income / Net Sales x 100 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. A post-closing trial balance is a list of permanent accounts and their balances from the The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for Return = reimbursement for Attorney A:Cost of goods sold refers to the expenses involved while the goods or services provided by the compa Q:Question 1 revenue and expense accounts ready for use in the next period.

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