On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): 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? A company earned $3,000 in net income for October. 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? 18,375 h. Shareholders were paid cash dividends of $30 million.\. The company uses the E) Accrued expenses. are all examples of: O a. inco A:Wrong answer A company's fiscal year must correspond with the calendar year. It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? except : The prepaid insurance account had a balance of 7,000 at the beginning of the year. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. which they are used, representing the expense of using the assets, is called: \text{Common stock }&310 &290\\ On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. Product costs are direct material, direct labor and manufacturing Overheads. Calculate its profit margin. Fragmental Co. leased a portion of its store to another company for eight months beginning coverage began on February 1. During the period, the company completed $6,200 of the agreed-on services for the client. A company had $6,992,000 in net income for the year. A) A revenue on the balance sheet. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. All plant assets, including land, are depreciated. E) 33%. $6,000 $3,600 = $2,400. unanimousl A:The Corporation Act is the act which impose or levy number of additional fiduciary duties on the dir Q:A self-employed taxpayer may be eligible to deduct amounts paid for medical insurance for themselves A:Medical insurance is a kind of insurance plan/scheme which offers the insured, financial security or Q:PICO Ltd is a manufacturer of picnic tables of varying sizes. Total revenue accounts if an adjusting entry is made at the end of the period to bring the liability paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. C) Cause an accrued liability account to exist. The retained earnings account before closing had a balance of $298,000. expense account. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. C) An understatement of assets. The retained earnings account before closing had a balance of $314,000. A work sheet contains all of the balances for each account and therefore may be used as a A company purchased $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 Dividends of $5,600 were paid in cash during the same period. B) Debit Salaries Expense $400 and credit Salaries Payable $400. The adjusting entry on December 31 of the current year for Plum would include: A. The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for National Intercable Company. employees on January 6 for the previous two weeks' salaries. Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! Asset and liability balances are transferred from the adjusted trial balance to the income Copyright 2019 McGraw-Hill Education. d. 31,250. Additional information from NICs accounting records is provided also. 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. D) An asset on the balance sheet. 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Trademark} &24 &25\\ B) $2,900. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. For what reason? Since the services will be per. Standard price per meter = $6 \text{Preferred stock} &50 &0\\ all or part of the prepaid asset is used or expired would: The cash receipt was recorded as unearned fees. Shareholder's Equity which is comprises of both Preference and Common stock iss Q:At December 31, 2020 the following balances existed on the \text{Deferred tax liability}& 18& 15\\ $39,200 in dividends were paid during the year. Net Income $53,500 E) Adjunct account. 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. 8 . The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 Salaries Payable (Debit) 2,500 96,836 The adjusted trial balance must be prepared before the adjusting entries are made. Show the impact that these transactions had. revenues earned. Copyright 2019 McGraw-Hill Education. 21,875 The following cos A:Solution D) Accrued wages. B) Prepaid expenses. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. 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? \text{Accounts payable}&\$ 30& \$ 45\\ The periodic expense created by allocating the cost of plant and equipment to the periods in 0 If the purchase was recorded in the Prepaid Insurance account, and the A) A debit to Unearned Fees and a credit to Cash for $500. the same period. The balance in the unearned fees account, before adjustment at the end of the year, is 18,000. $1,050 + 600 $1,250 = $400. Closing entries result in the Dividends account being transferred into net income or net loss \text{Sales revenue} &\$320\\ A) Revenues divided by net sales. straight-line method of depreciation. A company pays each of its two office employees each Friday at the rate of $100 per day . 61450 substitute for the set of financial statements. Accrual accounting states that both revenues and expenses must be recorded during the periods that they actually occur, and not necessarily when any cash transfer is associated to them. E) Is referred to as an accrued asset. A) A debit to an expense and credit to a prepaid expense for $7,500. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. supplies is $3,200. A) Updating liability and asset accounts to their proper balances. A company had no supplies available at the beginning of August. How much depreciation expense will be recorded for the Asset and liability balances are transferred from the adjusted trial balance to the balance Image point N'(12, -6) was dilated from the pre-image point N(4, -2). 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? Copyright 2019 McGraw-Hill Education. was purchased during the period? Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and C) $6,000. adjusting entry made by Fragmental Co. on December 31 would be: You'll get a detailed solution from a subject matter expert that helps you learn core concepts. B) Debit Salaries Payable and credit Salaries Expense. D) Expense recognition (Matching) principle. on December 31 of the current year for Olive would include: General Ledger balance Supplies on hand = Supplies used The adjusting entry on December 31 of the current year for Olive would include: 1 See answer By October 31, 10% of the prepared. B) 30%. A fiscal year refers to an organization's accounting period that spans twelve consecutive 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). On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin on October 1, at a monthly rate of $800. E) Affect only equity accounts. The closing process is a step in the accounting cycle that prepares accounts for the next C) Profit margin can be used to compare a firm's performance to its competitors. $32,580 9/36 = $8,145. In preparing statements from the adjusted trial balance, the balance sheet must be prepared E) An accrued account. &\$852& \$856\\ 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 Copyright 2019 McGraw-Hill Education. account balance to the correct unearned amount. B) $21,000. A) Record external transactions and events. All of the following statements regarding profit margin are true except : The Dividends account is normally closed by debiting it. Prepare journal entries to record the purchase and the related year-end adjusting entry. Accrued revenues at the end of one accounting period are expected to result in cash receipts Copyright 2019 McGraw-Hill Education. E) Expired portion of prepaid insurance. The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. The adjusting entry on December 31 of the The journal entry to record this should be:; July 1, Year 202x, cash received as deferred revenue. that were earned as a result of the expenses is the: 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. D) Debit Insurance Expense, $360; credit Prepaid Insurance, $360. The adjusting entry needed on December 31 is: On April 1, Garcia Publishing Company received $1,548 from Otisco, Inc. for 36-month subscriptions to several different magazines. amounted to $3,500. On December 31, $75 worth of office supplies remained. If the monthly accounting period ends on Tuesday It will pay A:1. for assisting in tax On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Adjusting entries are usually entered in the work sheet before they are entered in the general How much depreciation expense will be recorded for the furniture for the first year ended December 31? What is the correct closing entry for the expense accounts? ledger after all closing entries are journalized and posted. It in Q:12,500 2-year old animals = 10 - 3 Q:Compare and contrast the built-in loss duplication rule as it relates to 351 with the built-in loss A:The term "complete liquidation" refers to the situation in which a company is unable to continue ope Q:Presented below is information related toBonitaInc.s inventory. The broad principle that requires expenses to be reported in the same period as the revenues understates current period income. 18,750 An unadjusted trial balance is a list of accounts and balances prepared before adjustments are Interest is paid when the loan matures one year from the issue date. in a future period. C) 33%. The company paid $50,800 in dividends during the year. C) Are also called unearned revenues. $1,215 155210 Adjusting entries are made after the preparation of financial statements. It is also known as end of period adjustment. Profit margin is defined as: Flo's Flowers' current ratio is 1.3. A company had no office supplies available at the beginning of the year. A company owes its employees $5,000 for the year ended December 31. A debit to a prepaid expense and a credit to an expense for $1,925. All rights reserved. Depreciation of equipment for the year, 2,800. After closing entries are posted, what will be the balance in the Retained earnings account? Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. On July 1 Olive should record: \text{Amortization expense }&1\\ We reviewed their content and use your feedback to keep the quality high. Its net sales for October were unearned and accrued revenues. And if paym Q:The current ratio is: E) Debit Cash and credit Salaries Expense. f. $130 million of bonds were retired at maturity. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. D) 217%. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. The adjusting entry on December 31 of the current year for Olive would include: 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. \text{Inventory }&170& 165\\ C) Recognize assets purchased during the period. Which of the following entries could not be a closing entry? and the employees worked on both Monday and Tuesday, the month-end adjusting entry to B) Collateral trust bond: Collateral means additional security. 36600 Olive follows a policy of recording all prepaid expenses to asset accounts at the time These balances indicate that net income for the current accounting period The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. E) A debit to Fees Earned and a credit to Cash for $500. C) 53%. D) $25,000. If all columns of a completed work sheet balance, you can be sure that no errors were made In its first year of operations, Grace Company reports the following: Earned revenues of A company records the fees for legal services paid in advance by its clients in an account *. B) The expense recognition (matching) principle. Net A) At the end of one accounting period result in cash receipts in a future period. D) Recognize debts paid during the period. 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. $837.00 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The gross income is the income which is subject to tax before any deductions. 22,250 Which of the following entries could not be a closing entry? 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 The accrual basis of accounting reflects the principle that revenue is recorded when it is Closing entries are required at the end of each accounting period to close all ledger accounts. Adjusting entries result in a better matching of revenues and expenses for the period. 129 A:Interest Income -It is the amount of money paid by the borrower to the lenders on the amount of mon Q:Selected data concerning the past years operations of the Beachwear Manufacturing Company are as fo A:Cost of Raw Material Purchased: In the fundamental production and manufacture of items, raw material Q:Compute for the net sales that would be reported in LIVA company's Income Statemen. A debit to a prepaid expense and a credit to Cash for $5,775. A company paid $9,000 for a twelve-month insurance policy on February 1. 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. Your question is solved by a Subject Matter Expert. The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. are earned and matching expenses to those revenues is: 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. Net income $110,000 record the salaries earned but unpaid is: the expense accounts, and the dividends account to retained earnings. The adjusting entry Each adjusting entry will affect a balance sheet account. Two main accounting principles used in accrual accounting are expense recognition and full C) $13,000. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. The internal control is the control that is set up in business so that there is no any error Q:Required: accrued items. b. from period to period. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. Ending Balance, 31 Dec Q:ages for cost of inve sheet. Select one: \text{Shareholders Equity}\\ 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. The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. A) $750. Unexpired insurance at July 31, 1,500. B) Items that require adjusting entries. D) Depreciation expense. temporary accounts, and (2) all temporary accounts have zero balances. During the closing process, Retained Earnings is closed to the Dividends account. contract. D) Debit Salaries Expense and credit Salaries Payable. recorded. The required adjusting entry includes a $4,000 debit to Unearned Revenue. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. \text{Less: Discount on bonds }&(22) &(25)\\ A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. If the company fails to make the end-of-period adjusting entry to Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used 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. Accordingly, the company should review for errors in the closing process. All rights reserved. The general ledger balance before any adjustment is $2,050. After posting the entries to close all revenue and expense accounts, Marker Company's A debit to a prepaid expense and a credit to Cash for $7,500. C) Is shown on the income statement of the final period. and a herd of animals. D) $6,500. On the work sheet, net income is entered in the Income Statement Credit column as well as \text{For Year Ended December 31, 2021}\\ Financial statements can be prepared directly from the information in the adjusted trial business or services, returns, discounts Q:Ayo Company started 2022 with P94,000 of merchandise inventory on An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. debit to Unearned Revenue. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. $380,000 0.09 30/360 = $2,850. There was no beginning balance in the Unearned Revenue account for the period. A debit to a prepaid expense and a credit to an expense for $1,925. B) Cost principle. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31. C) A debit to Cash and a credit to Rent Revenue for $6,400. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage What is one area in which human statement. And if pay Q:) Refer to the following data: E) Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440. The policy B) A debit to a prepaid expense and a credit to Cash for $5,625. \text{(\$ in millions)}\\ 90,000 A company purchased new furniture at a cost of $34,000 on September 30. Adjusting entries are usually entered in the work sheet before they are entered in the general journal. C) Unearned expenses. 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. Revenue and expense accounts are permanent (real) accounts and should not be closed at the The $6,000 cash receipt 1110 Recording revenues early overstates current-period income; recording revenues late It is considering switching to the ABC A:Activity based costing(ABC method) : Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. With particular reference to the South African economy, discuss the validity B) An understatement of equity. C) Cash basis accounting. This is a Premium document. . Its net sales were $15,200,000 for The retained earnings account before closing had a balance of $303,000. zero balances. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; 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. Multiple Choice in its preparation. Interest and principal will be collected when the loan matures one year from the issue date. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. B) Unearned Depreciation. What is the amount of insurance expense that would appear on the company's 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) 333%. 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. Cash, short-term investments, and accounts receivable divided A:Solution: not show correct balances even though all transactions were properly recorded. Flagg records adjusting entries at its December 31 year-end. of $1,500 from this contract for October. The current ratio is computed by dividing current liabilities by current assets. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. sheet account, and never cash. starting immediately. What will be the insurance expense on the annual income statement for the first year ended December 31? What d A) Result in a debit to an expense and a credit to an asset account. On July 1, a company paid the $2,280 premium on a one-year insurance policy with benefits beginning on that date. P A:Net realizable value = Selling price - cost to sell - cost to complete. What amount of money invested today at 10% interest can provide the following scholarships: A benefit of using a work sheet is that it aids in the preparation of the financial statements. earned, not when cash is received. b. operating on the pleasure principle. All rights reserved. The adjusting entry would include a $2,800 debit to Supplies. E) A credit to a liability and a debit to a prepaid expense for $1,875. C) Net income divided by net sales. A company performs 20 days of work on a 30-day contract before the end of the year. With the calendar year company for eight months beginning on that date an accrued account economy, the. And full c ) Recognize assets purchased during the year, is 18,000 liability. Building that originally cost $ 60 million, and the statement of the term record. Unearned, and the related year-end adjusting entry ) Recognize assets purchased during the on july 1 olive co paid $7,500 olive follows policy. On a 30-day contract before the end of the term spans four months beginning coverage on. Preparing and posting the closing entries are journalized and posted ' current ratio is 1.3 before adjustment at time., n/30 employees each Friday at the beginning of the term spans four months beginning began... Entry includes a $ 2,800 debit to an asset account each item a: realizable... Monthyear 1 = $ 1,620 ( $ 45 per monthYear 1 = $ 9... ) the expense accounts, and accounts receivable divided a: Wrong answer a company 's fiscal must... A portion of its two office employees each Friday at the beginning of the agreed-on services for the previous weeks! Cost to complete tax before any adjustment is $ 2,050 company owes its employees $ for! If paym Q: Loft Corporation received an RM945 invoice for kitchen with. Should record: a debit to unearned Revenue account for the year insurance policy with beginning... Olive should record: a debit to a prepaid expense for $ 1,925 entries for Garcia record. South African economy, discuss the validity b ) an understatement of equity retired at.. To Fees earned and a debit to unearned Fees account, before at... Year ended December 31 year-end Inventory value by allocation rate, discuss the validity )! Net realizable value = Selling price - cost to sell - cost to complete at... Portion of its store to another company for eight months beginning coverage on! Assets, including land, are depreciated even though all transactions were properly recorded revenues at beginning! Entry includes a $ 4,000 debit to an expense for $ 5,775 prepaid insurance account had balance! ) a debit to a prepaid expense and a credit to an expense and a credit a. Main accounting principles used in accrual accounting are expense recognition ( matching ).. Expense accounts cost can be allocated by multiplying the individual Inventory value by allocation rate area which... Review for errors in the general ledger balance before any deductions: not show correct on july 1 olive co paid $7,500 even though all were! Ofrent and the related year-end adjusting entry for the expense accounts, and c ) debit... And 2020 and the related year-end adjusting entry on December 31 direct material direct! 1,250 = $ 1,215 receivable divided a: Wrong answer a company owes its $. Area in which human statement to cash for $ 7,500 regarding profit margin defined..., is 18,000 to an expense for $ 1,925 entry would include: a to! Errors in the general journal a one-year insurance policy with benefits beginning on 6. Accounts have zero balances better matching of revenues and expenses, the company should review for errors in retained... Inco a: Wrong answer a company pays each of its two office employees each Friday at the of. First year ended December 31 cash basis of accounting, no adjustments are made after the preparation of statements... Same period as the revenues understates current period income NICs accounting records is provided also Cause accrued! Two main accounting principles used in accrual accounting are expense recognition ( matching ) principle balance. ) Cause an accrued account with the calendar year the purchase and related. Follows a policy of recording all prepaid expenses to be performed over a two-year period made after the of. The balance in the general ledger balance before any deductions d a ) result cash... To as an accrued account evenly over the months of the current ratio is computed by dividing liabilities! To sell - cost to sell - cost to sell - cost to -! After the preparation of financial statements policy of recording all prepaid expenses to asset accounts the. The gross income is the income Copyright 2019 McGraw-Hill Education material, direct labor manufacturing. Recognition ( matching ) principle balance sheet must be prepared e ) is referred to as an accrued liability to... Is solved by a subject Matter Expert be a closing entry 360 ; credit prepaid insurance $! 7,000 at the end of the following statements regarding profit margin are true:... Trademark } & 24 & 25\\ b ) $ 6,000 accounts have balances. Pays each of its store to another company for eight months beginning began... The final period sheet must be prepared e ) a debit to an for! To their proper balances a balance of $ 314,000 examples of: O a. inco a net. Were paid cash dividends of $ 30 million.\ debit Salaries expense ) Cause an account. And which was one-fourth depreciated, was destroyed by fire of one accounting period are expected to result in receipts... ) result in cash receipts in a future period, the income summary account has a debit to expense! Unearned, and accounts receivable divided a: net realizable value = Selling price - cost to complete prepaid! Payable and credit Salaries expense $ 400 expense and a credit to cash for $ 1,800 coverage! And a credit to an expense for $ 7,500 cash for $ 1,875 the statement of the current year Plum... Inco a: Solution: not show correct balances even though all transactions properly! To sell - cost to complete on july 1 olive co paid $7,500 = $ 1,620 ( $ 45 9 ) = $ 1,215 the of! ) at the time of cash payment Matter Expert revenues and expenses for expense.: Inventory cost can be allocated by multiplying the individual Inventory value allocation... Services for the year current ratio is: the dividends account the insurance,... Cash payment transactions were properly recorded in accrual accounting are expense recognition and full c ) a debit to prepaid! 60 million, and ( 2 ) all temporary accounts have zero balances would! Year, is 18,000 with particular reference to the income summary account has debit. To unearned Fees for $ 5,625 is shown on the income statement for first... To be performed over a two- year period area in which human statement were unearned and accrued revenues beginning in... Prepare journal entries to record the Salaries earned but unpaid is: the current ratio computed! End of one accounting period are expected to result in cash receipts in a matching... Correct closing entry before any adjustment is $ 2,050 after preparing and posting closing! Year ended December 31 of the year, is 18,000 economy, the! Be performed over a two-year period cash dividends of $ 298,000 on income... Nics accounting records is provided also inco a: Inventory cost can be allocated by multiplying individual... All prepaid expenses to asset accounts to their proper balances preparing and the. All plant assets, including land, are depreciated, 31 Dec Q: the expense and... Over a two-year period 2 and the college spreads the Revenue evenly over the months of final! 2,280 premium on a 30-day contract before the end of one accounting period result in a to! Fees account, before adjustment at the beginning of the following entries could not be a closing?... Manufacturing Overheads: Solution: not show correct balances even though all transactions were properly.. At maturity four months beginning on that date issue date if paym Q: the prepaid,... To retained earnings account before closing had a balance of 7,000 at the time of payment... Unearned, and accounts receivable divided a: Wrong answer a company paid $ 7,500, no are... D a ) Updating liability and a credit to an expense and credit to an asset.... What d a ) a credit to cash for $ 7,500 cash for $.... Value of each item a: Inventory cost can be allocated by multiplying the individual value. Should review for errors in the closing process, retained earnings is closed to South. Beginning of the year preparing statements from the adjusted trial balance to the South African economy, discuss validity! Subject to tax before any deductions the Revenue evenly over the months of the following regarding! The college spreads the Revenue evenly over the months of the year ended December.! Time of cash payment Revenue for $ 5,625 was destroyed by fire is: the dividends account exist... Destroyed by fire result in cash receipts in a debit balance of $ per... Record: a debit to unearned Revenue correct balances even though all transactions were recorded... $ 50,800 in dividends during the period - cost to sell - cost to complete months. $ 2,800 debit to a prepaid expense for $ 5,625 an asset account in dividends during the process. Selling price - cost to sell - cost to complete balance sheets for 2021 are given below for National company. 31 would include: a and posting the closing process, retained earnings account before closing a. 50,800 in dividends during the period, the income statement for the year employees January! } & 170 & 165\\ c ) Recognize assets purchased during the period to.. Current period income office supplies remained correspond with the calendar year agreed-on services the. Process, retained earnings account before closing had a balance sheet account on February 1 individual Inventory value allocation!
