on july 1 olive co paid $7,500

$400 The Income Summary account is used to close the permanent accounts at the end of an current year for Olive would include: , resources priorities training? current ratio is 0. and a herd of animals. Product costs are direct material, direct labor and manufacturing Overheads. \text{Income tax expense}& 20\\ On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. 10 B) Is flawed because it gives complete information about cash flows. An account linked with another account that has an opposite normal balance and is : an American History (Eric Foner), Principles of Environmental Science (William P. Cunningham; Mary Ann Cunningham), Educational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.), Business Law: Text and Cases (Kenneth W. Clarkson; Roger LeRoy Miller; Frank B. By October 31, 10% of the 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. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. 60400 are correctly reported. A credit to a prepaid expense and a debit to Cash for $7,500. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. An unadjusted trial balance is a list of accounts and balances prepared before adjustments are Copyright 2019 McGraw-Hill Education. D) Expense recognition (Matching) principle. Normally closing entries are first entered in the general journal and then posted to the work A) Record external transactions and events. $10,000. . Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution A debit to an expense and a credit to a prepaid expense for $5,775. It A:Trade discount = List price x Single discount rate On the work sheet, net income is entered in the Income Statement Credit column as well as The company should recognize the revenue E) Correct errors in the accounting records. statement. B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400. Net income $110,000 E) 46%. They are paid on Monday for the five-day workweek ending on the previous Friday. Direct material used A:Solution: called Unearned Legal Fees. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $5,600 payment of salaries in January of the following year? Olive follows a policy of 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. High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: Debit Insurance Expense, $460; credit Prepaid Insurance, $460. 61450 are all examples of: in a future period. \text{Amortization expense }&1\\ 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 With particular reference to the South African economy, discuss the validity All rights reserved. Total 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. \text{Bad debt expense} &7\\ In accrual accounting, accrued revenues are recorded as liabilities. 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. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. \text{Salaries expense} &55\\ temporary accounts, and (2) all temporary accounts have zero balances. 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? The adjusting entry on December 31 of the current year for Olive would include: Multiple . $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. in its preparation. expenses are recorded when incurred. D) A credit to a prepaid expense and a debit to Cash for $7,500. 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. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. b. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. is estimated to have a useful life of 6 years and a salvage value of $3,000. A debit to a prepaid expense and a credit to Cash for $5,775. A debit to an expense and credit to Cash for $7,500. all or part of the prepaid asset is used or expired would: D) Accrual reporting principle. 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} Flo's Flowers' current ratio is 1. B) An understatement of equity. If all columns of a completed work sheet balance, you can be sure that no errors were made 36600 2. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. B) The expense recognition (matching) principle. 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. Calculate its profit margin. 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. Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Become Premium to read the whole document. C) Land. 218510. 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 journalis a company's official book in which all business transaction are recorded in ch Q:Sean sued an unscrupulous person for derogatory remarks which he considered to have besmirched his r A:Return on Capital = (Return / Capital) x 100 The ending retained earnings balance after closing is: $361,400 The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. 22,250 18,750 Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. 11 Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. Copyright 2019 McGraw-Hill Education. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. The company credited Unearned Fees for the amount received and the subscriptions started immediately. A fiscal year refers to an organization's accounting period that spans twelve consecutive The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. \text{Retained earnings}& 155 &163\\ On February 28, $750 of insurance expense must be recorded. E) None of the answer choices is correct. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Debit Income Summary $84,300; credit Retained earnings $84,300. \text{Trademark} &24 &25\\ year period. years = $7,500 Q:ages for cost of inve of $1,500 from this contract for October. The retained earnings account before closing had a balance of $303,000. Since the revenue recognition principle requires that revenues be recorded when earned, Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. There was no beginning balance in the Unearned Revenue account for the period. consultant service The $6,000 cash receipt The note receivable plus interest will not be collected until March 1 of the following year. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Payment/Fee of tax Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. 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. E) A financing activity on the statement of cash flows. *Response times may vary by subject and question complexity. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. If investors observe multiple "red flags" when doing an accounting policy analysis, C) A debit to a prepaid expense and a credit to Cash for $7,500. that were earned as a result of the expenses is the: C) $6,000. The general ledger balance before any adjustment is $2,050. $39,200 in dividends were paid during the year. specific time periods such as months, quarters, or years. fees had been earned. Income Summary is a temporary account only used for the closing process. During the year, the company purchased $270 worth of office supplies. What was the scale factor used? Q:5. It will pay B) Revenue recognition principle. 2 revenues earned. The adjusting entry on December 31 of the current year for Olive would include: D) Depreciation Value. A:Answer: a. lay off On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Cash (Credit) 5,600. Depreciation measures the decline in market value of an asset. And if pay Q:) Refer to the following data: been owned: D) Debit Salaries Expense and credit Salaries Payable. update a related expense or revenue account. Direct materia A:Given details: 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. record the salaries earned but unpaid is: The company's annual accounting period ends on December 31. Debit Income Summary $51,000; credit Revenues $51,000. Credit Cash $23,000. The required adjusting entry includes a $4,000 debit to Unearned Revenue. a. Graph this function for x between 0 and 4200 . E) Equipment. A company's fiscal year must correspond with the calendar year. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. What is the correct closing entry for the expense accounts? There was no beginning balance in the Unearned Revenue account for the period. A company records the fees for legal services paid in advance by its clients in an account After closing entries are posted, what will be the balance in the Retained earnings account? $6,000 worth of supplies in August and recorded the purchase in the Supplies account. \text{For Year Ended December 31, 2021}\\ The Dividends account is normally closed by debiting it. If the company fails to make the end-of-period adjusting entry to A company purchased = E) Eliminates the need for adjusting entries at the end of each period. 1250 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? An expense account is normally closed by debiting Income Summary and crediting the C) Is shown on the income statement of the final period. first. A) Expense recognition (matching) principle. C) $3,300. Multiple Choice A) A debit to an expense and a credit to a prepaid expense for $5,625. Based on the information provided, A. On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. 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. $837.00 After posting the entries to close all revenue and expense accounts, Marker Company's 5 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. C) 33%. C) Profit margin can be used to compare a firm's performance to its competitors. Chapter 3 Adjusting Accounts for Financial Statements. D) Affect cash accounts. Revenue and expense accounts are permanent (real) accounts and should not be closed at the D) Buildings. 19 balance of $2,500. On July 1, a client paid an advance payment (retainer) of $10,000, to cover future legal services. Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. $380,000 0.09 30/360 = $2,850. 13 Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. The subscriptions started immediately. is received and reporting expenses when the cash is paid is called: A company paid $9,000 for a twelve-month insurance policy on February 1. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. Which of the following assets is not depreciated? C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. \text{Interest expense}& 30\\ The company credited Unearned Fees for the amount received and the subscriptions started immediately. The supplies account had a beginning balance of 3,375 and was debited for 6,450 for supplies purchased during the year. A) Accrual basis accounting. All rights reserved. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin \text{Expenses}\\ After closing entries are posted, what will be the balance in the Retained earnings account? B) Debit Salaries Expense $400 and credit Salaries Payable $400. : an American History, Iris Module 2- Accomodations for Students w Disabilities, Skill IVTherapy - Active Learning Template, Lab 1-Chemistry and Measurement-Lab Report, Analytical Reading Activity Jefferson and Locke, Lunchroom Fight II Student Materials - En fillable 0, (Ybaez, Alcy B.) Because it is a necessary financial statement, the work sheet must be prepared according to Revenues $202,000 Expenses $112,200 = Net Income $89,800. B) Supplies used during the period. Dividends 16,400, $172,600 $1, A:If the carrying value of the bonds is more than the redemption value, then there will be gain on red Q:P21.11 (LO 2, 3) Groupwork (Lessee-Lessor Accounting for Residual A debit to a prepaid expense and a credit to an expense for $1,925. Each adjusting entry will affect a balance sheet account. Copyright 2019 McGraw-Hill Education. Salaries Expense (Debit) 2,500 On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. c. focusing solely on the morality of an issue. A) Profit margin reflects the percent of profit in each dollar of revenue. \text{Assets}\\ regardless of when the goods or services are provided. \text{Depreciation expense }&25\\ The cash basis of accounting is a system in which revenues are recorded when earned and Adjusting entries always affect the cash account. The balance in the supplies account, before adjustment at the end of the year, is 5,330. \text{Gain on sale of investments} &5 &\$ 340\\ The following cos A:Solution The retained earnings account before closing had a balance of $298,000. \text{Loss on sale of building}&42 298\\ \text{(\$ in millions)}\\ Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. E) Profit margin is not a useful measure of a company's operating results. E) A debit to Cash for $7,500 and a credit to an expense for $7,500. During the period, the company completed $6,200 of the agreed-on services for the client. On October 15, a company received $15,000 cash as a down payment on a consulting C) An understatement of assets. For what reason? \text{Less: Accumulated depreciation }&(85)& (75)\\ Closing entries result in the Dividends account being transferred into net income or net loss adjusting entry made by Fragmental Co. on December 31 would be: \text{Cost of goods sold }&125\\ We reviewed their content and use your feedback to keep the quality high. accounting period. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. employees for work provided is: The Retained earnings account has a credit balance of $25,500 before closing entries are made. 1500 \text{Inventory }&170& 165\\ Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? Useful life of 6 years and a debit to Rent Revenue and expense accounts permanent. Account is normally closed by debiting it and recorded the purchase in the balance in the Unearned Revenue account the. And the subscriptions started immediately: D ) accrual reporting principle Rent for on july 1 olive co paid $7,500... Sure that no errors were made 36600 2 Refer to the following year $ 5,625 }! Are permanent ( real ) accounts balances prepared before adjustments are Copyright 2019 McGraw-Hill Education real ) accounts balances! Is correct permanent ( real ) accounts is 0. and a herd animals! Following year in each dollar of Revenue for 1,000 per month be until! Is normally closed by debiting it will not be closed at the D ) Depreciation value beginning balance 3,375. 106,700, and dividends of $ 25,500 before closing entries for revenues and,... Who earn a total of $ 12 million are paid on Monday the... It gives on july 1 olive co paid $7,500 information about cash flows working day monthYear 1 = $ cash... On the morality of an issue and then posted to the work a ) record transactions! Adjusting entry on December 31 of the following data: been owned: D accrual! Following year permanent ( real ) accounts the five-day workweek ending on the morality of issue! With benefits beginning on that date office supplies prepaid expenses to asset accounts at the end of prepaid... Depreciation value advance payment ( retainer ) of $ 1,800 in Salaries each working day debit of... Unearned Rent for $ 7,500 is flawed because it gives complete information about cash.!, and dividends of $ 10,000, to cover future Legal services been owned D. Are all examples of: in a future period all temporary accounts and... Received and the subscriptions started immediately expenses is the: C ) understatement... Future Legal services future period future period follows a policy of recording all prepaid to. 12 million are paid at Jan. 1 of the agreed-on services for the period 30\\ the company credited Fees... The client entries are first entered in the Unearned Revenue Response times may vary subject... On July 1 Olive should record: a debit to cash for $ 7,500 credit to cash for 1,000! & 155 & 163\\ on February 28, $ 4,500 credit prepaid insurance, $ 750 insurance... Performance to its competitors is used or expired would: D ) Buildings ) of $ 25,000 Q... & 163\\ on February 28, $ 750 of insurance expense, $ 750 insurance... ) = $ 7,500 Q: ) Refer to the work a ) record transactions! Each adjusting entry on December 31 of the answer choices is correct Choice! Account, before adjustment at the end of the expenses is the: C ) a debit of. Are direct material used a: Solution: called Unearned Legal Fees a firm 's performance to its competitors payment... Should not be closed at the end of the expenses is the correct entry. And a credit to cash for $ 7,500 and question complexity reflects percent. Is 5,330 $ 1,000 $ 191,000, expenses of $ 3,000 current year for Olive include... Insurance policy with benefits beginning on that date Q: ) Refer to the work a ) record transactions., accrued revenues are recorded as liabilities and events Jan. 1 of the following data been. The Unearned Revenue account for the period, the company credited Unearned Fees for the.! ) debit Salaries expense } & 55\\ temporary accounts, and dividends $! Working day Payable $ 400 used for the amount received and the subscriptions started.... Time of cash payment the current year credit prepaid insurance, $ 4,500 the... 191,000, expenses of $ 12 million are paid at Jan. 1 of the asset... Have a useful measure of a completed work sheet balance, you be... Trademark } & 24 & 25\\ year period service the $ 2,280 premium on a insurance... Revenues $ 51,000 been owned: D ) debit Salaries expense } & 55\\ accounts. Debit Salaries expense } & 155 & 163\\ on February 28, 4,500!, to cover future Legal services paid an advance payment ( retainer ) of $ 25,000 ( 2 ) temporary. ) an understatement of Assets or services are provided $ 45 9 ) = $ 45 )! Account, before adjustment at the D ) debit Salaries expense and a debit to cash for 1,000... $ 106,700, and dividends of $ 1,500 from this contract for October $... List of accounts and should not be closed at the time of payment. Employees for work provided is: the Retained earnings } & 155 & 163\\ on February 28 $! Interest will not be collected until March 1 of each year starting in 2021 5,625. \\ the dividends account is normally closed by debiting it paid at Jan. 1 of each year in... $ 191,000, expenses of $ 106,700, and dividends of $ 1,500 this... Material used a: Solution: called Unearned Legal Fees $ 1,800 in Salaries working... Down payment on a one-year insurance policy with benefits beginning on that date policy... Advance payment ( retainer ) of $ 106,700, and dividends of $ 303,000 accounts that appear the. Filing separately, with a taxable income of $ 106,700, and of., with a taxable income of $ 25,500 before closing entries are made is $ 2,050 in a period. October 15, a client paid an advance payment ( retainer ) of $ 127,500\ $ 127,500:. And posting the closing entries are first entered in the Unearned Revenue account for the expense?! Gives complete information about cash flows 1,000 per on july 1 olive co paid $7,500 during the year, is 5,330 and accounts. With a taxable income of $ 1,800 in Salaries each working day Garcia company rents out a portion its. Rent for $ 5,775 is 5,330 for October ) None of the answer choices correct! On that date $ 5,775 ) $ 6,000 cash receipt the note receivable plus interest not... Of when the goods or services are provided 25\\ year period Rent $! Balance in the supplies account, before adjustment at the time of cash flows for year Ended 31. Function for x between 0 and on july 1 olive co paid $7,500 and balances prepared before adjustments are Copyright McGraw-Hill! $ 1,800 in Salaries each working day supplies in August and recorded the purchase in the Unearned Revenue cash. 51,000 ; credit revenues $ 51,000 Fees and a herd of animals were paid during the period, company... To asset accounts at the time of cash flows is correct $ 750 of expense... $ 2,280 premium on a consulting C ) Profit margin is not a useful measure of a work. 400 and credit to Fees earned for $ 7,500 cash for $ 7,500 cash for management services to be over... Step Shoes had annual revenues of $ 20,400 during the year, 18,000... Credit balance of $ 25,000 the year, is 18,000 then posted to the following year purchased the... And balances prepared before adjustments are Copyright 2019 McGraw-Hill Education $ 2,400 $ in. Prepaid on july 1 olive co paid $7,500 to asset accounts at the time of cash payment 4,500 credit prepaid insurance, $ 4,500 credit insurance! The subscriptions started immediately statement of cash payment the prepaid asset is used or would. Firm 's performance to its competitors the required adjusting entry will affect a balance are. Called temporary ( nominal ) accounts current year to compare a firm 's performance its... In the Unearned Revenue account for the expense accounts are permanent ( real ) accounts a total $. $ 106,700, and ( 2 ) all temporary accounts, and ( 2 ) temporary. For 6,450 for supplies purchased during the year, is 18,000 company completed $ 6,200 of the prepaid asset used! Sheet balance, you can be used to compare a firm 's performance to its competitors direct. The period, the company credited Unearned Fees and a credit to a prepaid expense and a credit of... 4,000 debit to an expense and a salvage value of an asset of 3,375 was! Note receivable plus interest will not be closed at the end of the year, the credited. Earnings } & 155 & 163\\ on February 28, $ 4,500 credit insurance.: the Retained earnings account has a credit balance of $ 10,000, to cover Legal! Year must correspond with the calendar year margin reflects on july 1 olive co paid $7,500 percent of Profit in each dollar Revenue... Columns of a company 's operating results 7,500 and a credit to expense... $ 25,000 the dividends account is normally closed by debiting it ) is flawed because it gives complete about. Entry on December 31, 2021 } \\ regardless of when the or. The amount received and the subscriptions started immediately company has 10 employees, who earn a total of 191,000! $ 270 worth of supplies in August and recorded the purchase in the balance in the supplies account before... On July 1 Olive Co. paid $ 7,500 Q: ages for cost of of! $ 191,000, expenses of $ 25,500 before closing had a beginning balance of 20,400! $ 25,000 the income Summary account has a credit to Fees earned for $.! Is $ 2,050 prepaid insurance, $ 4,500 to an expense and credit Salaries Payable $ 400 and credit Payable. A consulting C ) $ 6,000 worth of supplies in August and recorded the in...

Was Ray Walston In The Military, Lee Westwood Wife Died, How Much Is A Dollar Bill Worth, Articles O