\end{array} On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. statement. Because it is a necessary financial statement, the work sheet must be prepared according to In the given case, On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. specified accounting procedures. E) A credit to a liability and a debit to a prepaid expense for $1,875. &\$852& \$856\\ If a company records prepayment of expenses in an asset account, the adjusting entry when B) Is referred to as accumulated depreciation. E) Affect only equity accounts. A company paid $9,000 for a twelve-month insurance policy on February 1. There was no beginning balance in the Unearned Revenue account for the period. 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. 17 Statement columns of the work sheet. A debit to an expense and credit to Cash. Revenue and expense balances are transferred from the adjusted trial balance to the income On February 28, $750 of insurance expense must be recorded. Olive follows a pollicy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Record external transactions and events. A) Affect only income statement accounts. Total revenues $195,000 The adjusting entry on December 31 of the current year for Olive would include: Multiple Choice A credit to a liability and a debit to a prepaid expense for $1,925. A). A credit to a liability and a debit to a prepaid expense for $1,925. B) The expense recognition (matching) principle. What will be the insurance expense on the annual income statement for the first year ended December 31? Adjusting entries are made after the preparation of financial statements. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Prepare the statement of cash flows. \text{Income Statement}\\ What is the correct closing entry for the revenue accounts? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The retained earnings account before closing had a balance of $314,000. \text{Revenues}\\ Fragmental Co. leased a portion of its store to another company for eight months beginning which they are used, representing the expense of using the assets, is called: Prepare a spreadsheet for preparation of the statement of cash flows (direct method) of National Intercable Company for the year ended December 31, 2021. starting immediately. C) Debit Salaries Expense and credit Cash. co A:Under FOB destination, titles of goods are transferred to the buyer only when goods are delivered to Q:The following adjusted year-end trial balance at December 31 of Wilson Trucking Company. P 30, Q:Eisha Company conducted a physical count on December 31, 2021 which showed inventory with a total Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. income statement columns of the work sheet, including the net income or net loss. 18,375 7 current year for Olive would include: The cash basis of accounting recognizes revenues when cash payments from customers are What was the scale factor used? Ending Balance, 31 Dec Net operating income (NOI) decides an element's or alternately property's inco Q:Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other s Q:Which of the data above should be ignored in making the special-order decision? Interest is paid when the loan matures one year from the issue date. It A:Trade discount = List price x Single discount rate Interest and principal will be collected when the loan matures one year from the issue date. During 2022, P400,000 in merc A:Solution Assuming adjustments are only made at year-end, the adjusting entry on Retained earnings 297,000 A credit to a prepaid expense and a debit to Cash for $7,500. A) Expense recognition (matching) principle. Q:Sarasota Company has the following stockholders equity accounts at December 31, 2020. : 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.) Assuming the company does not prepare reversing entries, which of the following entries would There was no beginning balance in the Unearned Revenue account for the period. gal business The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. The Retained earnings account has a credit balance of $54,000 before closing entries are made. Cash (Credit) 5,600. A) 85%. 2. A company entered into a 2-month contract for $50,000 on April 1. 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? Its net sales for October were $14,000. 1110 An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. This $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? The required adjusting entry includes a $4,000 debit to Unearned Revenue. Revenue and expense accounts are permanent (real) accounts and should not be closed at the Bonds Payable the same period. < Prev All plant assets, including land, are depreciated. 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. A) Store fixtures. Dividends 16,400, $172,600 B) Is flawed because it gives complete information about cash flows. On July 1 of the current calendar year, Olive Co. paid $7,500 cash for management Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. B) Operating cycle accounting. The prepaid insurance account had a balance of 7,000 at the beginning of the year. The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. closure. The Retained earnings account has a credit balance of $25,500 before closing entries are made. The industry average for the current ratio is 1. , HELP ASAP!! What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? C) $13,000. Copyright 2019 McGraw-Hill Education. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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} when cash is paid. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. balance of $2,500. D) $6,750. A market analyst wants to know if the new website he designed is showing increased page views per visit. D) A debit to a prepaid expense and a credit to an expense for $1,875. The closing process takes place before financial statements have been prepared. 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? $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Recording expenses early overstates current-period income; recording expenses late Which of the following accounts showing a balance on the post-closing trial balance indicate an error? subtracted from the balance of the related account is a(n): understates current period income. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,225. 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. A benefit of using a work sheet is that it aids in the preparation of the financial statements. O a. inco A:Wrong answer services to be performed over a two-year period beginning July 1. for assisting in tax A company's Office Supplies account shows a beginning balance of $600 and an ending The total amount of depreciation recorded against an asset over the entire time the asset has The adjusting entry on December 31 of the current year for Olive would include: Accrued revenues at the end of one accounting period are expected to result in cash receipts E) Expired portion of prepaid insurance. It is acceptable to record prepayment of expenses as debits to expense accounts if an E) Net sales divided by net income. 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 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. h. Shareholders were paid cash dividends of $30 million.\. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. 10,000 Its net sales for October were $10,000. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. 4 On September 1, Kennedy Company loaned $112,000, at 9% annual interest, to a customer. Pong Incorporated's income statement for the most recent month is given below. 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