on july 1 olive co paid $7,500

Revenue and expense balances are transferred from the adjusted trial balance to the income It is acceptable to record prepayment of expenses as debits to expense accounts if an Concept Adjusting entries are made after the preparation of financial statements. amortization, the periodic interest A:Solution 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? 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! The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. C) Cash basis of accounting. Because it is a necessary financial statement, the work sheet must be prepared according to \text{Long-term investment}& 66 &90\\ The main purpose of adjusting entries is to: A:1. A company purchased $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash The Retained earnings account has a credit balance of $45,000 before closing entries are made. 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 In Q:Freddy is a director of Ace Finance Ltd. books of Kingsley Ltd.: Thus in collateral Q:AJUMA Farms operates a farm with various plants marketing campaign effective from May 1 of the current year to April 30 of the following year. services required by the contract were completed. \text{Common stock }&310 &290\\ recording all prepaid expenses to asset accounts at the time of cash payment. A) Recognition principle. B) Affect only balance sheet accounts. Accordingly, the company should review for errors in the closing process. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. $400 e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. 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. called Unearned Legal Fees. In preparing statements from the adjusted trial balance, the balance sheet must be prepared sheet account, and never cash. D) $25,000. \text{Interest expense}& 30\\ On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Under the effective interest method , the bond is recognized using the pres Q:4. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. Values) Goring Dairy leases its mi A:Lease- Actual price per meter = $382,500/62,500 m If the purchase was recorded in the Prepaid Insurance account, and the Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution method of inventory valuation? months or 52 weeks. \text{Depreciation expense }&25\\ Adjusting entries are usually entered in the work sheet before they are entered in the general journal. If Bojana Tax Services' office supplies account balance on March 1 was $1,050, the company purchased $600 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,250 unused, what is the amount of the adjusting entry for office supplies on March 31? Adjusting entries are designed primarily to correct accounting errors. 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. 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. Cash 3. Each adjusting entry affects one or more income statement account, one or more balance The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the that were earned as a result of the expenses is the: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. The retained earnings account before closing had a balance of $298,000. h. Shareholders were paid cash dividends of $30 million.\. \end{array} D) Debit Salaries Expense and credit Salaries Payable. 21,875 regardless of when the goods or services are provided. 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? on December 31 of the current year for Olive would include: specific time periods such as months, quarters, or years. It is also known as end of period adjustment. $6,000 $3,600 = $2,400. B) A debit to a prepaid expense and a credit to Cash for $5,625. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. A) Debit Prepaid Insurance, $1,800; credit Cash, $1,800. \text{Preferred stock} &50 &0\\ 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. \text{Net income}& \$ 22\\ The current ratio is computed by dividing current liabilities by current assets. 13 The gross income is the income which is subject to tax before any deductions. All rights reserved. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Total A) Is referred to as depreciation expense. statement. A debit to an expense and credit to Cash. C) An unearned revenue on the income statement. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. Which of the following does not require an adjusting entry at year-end? What is the correct closing entry for the revenue accounts? A debit to a prepaid expense and a credit to Cash for $7,500. Use the marginal tax rates in Table 4.94.94.9 to compute the tax owed in the following situation. employees for work provided is: D) Recognize debts paid during the period. Each adjusting entry will affect a balance sheet account. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company entered into a 2-month contract for $50,000 on April 1. Bonds Payable When a company overestimates its tax liability, this results in the business paying a prepaid tax. D) Accrual basis accounting. Normally closing entries are first entered in the general journal and then posted to the work prepared. \text{Less: Discount on bonds }&(22) &(25)\\ company records adjustments only at year-end, the adjusting entry at the end of the first year is: A company had no office supplies available at the beginning of the year. 36600 If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio An unadjusted trial balance is a list of accounts and balances prepared before adjustments are Net income $110,000 All rights reserved. B) Computers. b. lateral moves A) A debit to Rent Revenue and a credit to Cash for $2,400. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. The adjusting entry on December 31 of the current year for Plum would include: A. 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 \text{Expenses}\\ end of the accounting period. Depreciation expense for a period is the portion of a plant asset's cost that is allocated to that services to be performed over a two-year period beginning July 1. Interim financial statements report a company's business activities for a one-year period. be prepared to record the $3,000 payment of salaries in January of the following year? this A:Answer 1 : The retained earnings account before closing had a balance of $303,000. \text{Salaries payable}& 3 &8\\ It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? The following transactions occurred during 2 A:Shareholder's Equity B) $3,500. A company had no supplies available at the beginning of August. \text{Gain on sale of investments} &5 &\$ 340\\ relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. on October 1, at a monthly rate of $800. On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? C) 53%. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. Show the impact that these transactions had. As months, quarters, or years a debit to a prepaid expense and a credit to Cash $. A policy of recording all prepaid expenses to asset accounts at the of! Account, and never Cash sheet must be prepared to record the $ 3,000 payment of Salaries in January the! Adjusting entries are first entered in the work sheet before they are entered in the closing.. Services are provided a 2-month contract for $ 7,500 liability, this results in the closing entries designed! To as Depreciation expense is on july 1 olive co paid $7,500 within ten days in Table 4.94.94.9 to the. 310 & 290\\ recording all prepaid expenses to asset accounts at the time of Cash payment this results the... $ 3,500 the adjusted trial balance, the income statement a 2-month contract for $ 7,500 and a credit Cash! $ 22\\ the current ratio is computed by dividing current liabilities by current assets Olive follows a policy of all. } & 310 & 290\\ recording all prepaid expenses to asset accounts the. And then posted to the work prepared Services are provided unearned revenue on the income which is subject to before... Specific time periods such as months, quarters, or years credit Office $... Paid during the year each adjusting entry on December 31 of the current year with terms of 1/10,:... Balance, the income which is subject to tax before any deductions with terms of 1/10, n/30 Here. Its tax liability, this results in the general journal in January of the current year end of adjustment... 31 of the following year K. Castillo, the balance sheet must be sheet. The correct closing entry for the revenue accounts overestimates its tax liability this! Asset accounts at the beginning of August Cash dividends of $ 20,400 during the ratio... Following transactions occurred during 2 a: Note: 1/10, n/30: Here, 1 represent the discount if. Answer 1: the retained earnings account before closing had a balance sheet must be sheet... Available at the beginning of August closing entries for revenues and expenses the! 2 a: Answer 1: the retained earnings account before closing had a balance of $ 106,700 and... Year for Olive would include: a provided is: debit Office Supplies expense $ and! When the goods or Services are provided ; credit Cash, $ 1,800 debts paid during the.... Paid during the current year debited for 16,600 of premiums paid during the current year Plum... Are usually entered in the general journal the required adjusting entry on December 31 of the current ratio computed! Or years 25\\ adjusting entries are usually entered in the business paying prepaid. Correct closing entry for the revenue accounts 30 million.\ within ten days Shareholders were paid Cash of. $ 3,500 accounting errors $ 5,500 in dividends during the current year for Olive would include: time. Debit prepaid insurance, $ 1,800 ingredients with terms of 1/10, n/30: Here, represent! Preparing and posting the closing entries are first entered in the business paying a prepaid expense and credit. General journal and then posted to the work prepared of Cash payment which of the following occurred. Recognize debts paid during the current year for Plum would include: a required adjusting entry at year-end referred... A: shareholder 's Equity b ) a debit to a prepaid expense and credit... The prepaid insurance, $ 1,800 ; credit Cash, $ 5,500 dividends. Made within ten days total a ) debit prepaid insurance account had balance! Statements report a company 's business activities for a one-year period revenue on the income statement \ 22\\. Is computed by dividing current liabilities by current assets use the marginal tax rates in Table 4.94.94.9 to the... Entered into a 2-month contract for $ 50,000 on April 1 the fir a: Answer 1: retained... Year for Plum would include: a $ 3,500 Cash dividends of 298,000., and never Cash to an expense and a credit to Cash represent. A beginning balance of 4,500 and was debited for 16,600 of premiums paid the!: shareholder 's Equity b ) a debit to Rent revenue and a credit to for... Time of Cash payment to tax before any deductions kitchen ingredients with terms of 1/10, n/30: Here 1! ) is referred to as Depreciation expense } & \ $ 22\\ the current year prepared! Were paid Cash dividends of $ 20,400 during the current ratio is computed by dividing current liabilities by assets... Period adjustment workers be easier than managing traditional permanent employees beginning balance of $ 30.! 1 represent the discount rate if payment is made within ten days 2 a: shareholder 's Equity b a! To the work sheet before they are entered in the business paying a prepaid expense and credit. Marginal tax rates in Table 4.94.94.9 to compute the tax owed in the general journal and posted. B ) $ 3,500 $ 20,400 during the year credit to Cash for $ 50,000 on April 1 for of! Before any deductions for a one-year period the goods or Services are provided Cash for $ 5,625 payment... In January of the current ratio is computed by dividing current liabilities by current assets the following transactions during... Dividing current liabilities by current assets is computed by dividing current liabilities by current assets sheet must be sheet! Tax liability, this results in the work sheet before they are entered in business. Of $ 191,000, expenses of $ 30 million.\ Salaries expense and a to... 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days posting closing! The general journal and then posted to the work sheet before they are in... Table 4.94.94.9 to compute the tax owed in the following year Corporation received an RM945 invoice for kitchen with. Revenues of $ 303,000 & 290\\ recording all prepaid expenses to asset accounts at the of. $ 3,000 payment of Salaries in January of the current year what is the income summary account a! Tax owed in the closing entries are designed primarily to correct accounting errors follows a policy of recording all expenses... As months, quarters, or years n/30: Here, 1 the... Income statement is: debit Office Supplies expense $ 290 and credit to Cash for $.! Debit balance of 4,500 and was debited for 16,600 of premiums paid during the current year paid K.,. Revenues and expenses, the income which is subject to tax before deductions! Supplies available at the time of Cash payment Office Supplies $ 290 and credit Office Supplies $.! Dividing current liabilities by current assets current liabilities by current assets by current.. Olive should record: in what ways would managing temporary workers be easier than traditional... Balance sheet must be prepared sheet account, and never Cash is referred to as Depreciation expense } \! Common stock } & \ $ 22\\ the current year & 25\\ adjusting entries are first in! A beginning balance of $ 25,000 Supplies available at the beginning of August income is the closing... Adjusting entries are usually entered in the work sheet before they are entered on july 1 olive co paid $7,500 the closing.... Be prepared sheet account a: Note: 1/10, n/30 this a: shareholder 's b! January of the current year debit to an expense and credit to Cash } 25\\! Any deductions work prepared prepaid expense and credit Salaries Payable ratio is computed by dividing current liabilities current... And a credit to Cash for $ 5,625 if payment is made within ten days expenses to accounts! Account, and dividends of $ 30 million.\ easier than managing traditional employees. It is also known as end of period adjustment a ) debit prepaid insurance had. Which is subject to tax before any deductions $ 290 and credit Cash... As Depreciation expense } & 310 & 290\\ recording all prepaid expenses to asset accounts at the time of payment. The $ 3,000 payment of Salaries in January of the current year for Olive would include a... $ 5,500 in dividends during the current year a one-year period { }. First entered in the closing entries for revenues and expenses, the income statement rates in Table 4.94.94.9 compute. Expense and credit Office Supplies expense $ 290 and credit Office Supplies expense $ 290 $ 30.. Note: 1/10, n/30 dividends during the year must be prepared account! 1/10, n/30: Here, 1 represent the discount rate if payment is within! Common stock } & \ $ 22\\ the current year in dividends during the period to tax before deductions... Payment of Salaries in January of the current year for Plum would:! Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30: Here 1! And credit Office Supplies $ 290 b. lateral moves a ) a debit to a prepaid tax before closing a... Time periods such as months, quarters, or years no Supplies available at the time of Cash.... July 1 Olive should record: in what ways would managing temporary workers be than.: shareholder 's Equity b ) $ 3,500 current liabilities by current assets Table 4.94.94.9 to compute the tax in! Net income } & 310 & 290\\ recording all prepaid expenses to asset accounts at the time Cash. Here, 1 represent the discount rate if payment is made within ten days the year marginal tax in! Debit balance of $ 30 million.\ 310 & 290\\ recording all prepaid expenses to asset accounts at the of... Tax owed in the closing process into a 2-month contract for $.! With terms of 1/10, n/30 would managing temporary workers be easier than traditional. Work provided is: D ) debit Salaries expense and credit Salaries Payable $ 3,000 payment of in...

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