on july 1 olive co paid $7,500

statement. regardless of when the goods or services are provided. expense account. A company pays each of its two office employees each Friday at the rate of $100 per day Make the December 31 adjusting journal entry to bring the balances to correct. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Asset and liability balances are transferred from the adjusted trial balance to the balance The company's annual accounting period ends on December 31. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. A) $750. sheet account, and never cash. C) 53%. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. substitute for the set of financial statements. On July 1 Olive should record: The Retained earnings account has a credit balance of $46,000 before closing entries are made. A company had $6,992,000 in net income for the year. The amount of interest revenue that should be reported in the first year is: $5,000 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. The accrual basis of accounting: Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. E) Equipment. A company entered into a 2-month contract for $50,000 on April 1. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Select one: Account Tit A:Solution . D) $25,000. The amount was credited to Unearned Consulting Revenue. C) 33%. A company performs 20 days of work on a 30-day contract before the end of the year. \text{Salaries expense} &55\\ What amount of money invested today at 10% interest can provide the following scholarships: 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. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. D) Is only recorded when the asset is disposed of. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. $2,050 $1,245 = $805. 18 of 30 The cash basis of accounting is a system in which revenues are recorded when earned and A) Profit margin reflects the percent of profit in each dollar of revenue. All rights reserved. The periodic expense created by allocating the cost of plant and equipment to the periods in \text{Investment revenue} &15\\ The closing process takes place before financial statements have been prepared. The expense recognition (matching) principle requires that expenses get recorded in the same $1,050 + 600 $1,250 = $400. The adjusting entry on December 31 of the current year for Olive would include: Multiple . , HELP ASAP!! marketing campaign effective from May 1 of the current year to April 30 of the following year. 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. mbling activities. c. termination 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? Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Total revenues $195,000 A debit to an expense and a credit to a prepaid expense for $1,925. the same period. Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. 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. The accounting principle that requires revenue to be recorded when earned is the: Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. Net income for a period will be understated if accrued revenues are not recorded at the end of Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. . All rights reserved. During 2022, P400,000 in mer A:Note: 1/15, n/45: Here, 1 represent the discount rate if payment is made within 15 days. After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $25,000. Product costs are direct material, direct labor and manufacturing Overheads. was purchased during the period? Based on the information provided, A. b. lateral moves On July 1 Olive should record: D) $6,500. D) Revenue recognition accounting. $39,200 in dividends were paid during the year. $7,500/2 = $3,750 per month. 22,250 All rights reserved. \text{Accounts payable}&\$ 30& \$ 45\\ relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. sheet. Additional information from the accounting records: a. \text{Inventory }&170& 165\\ 36600 Its profit margin is: E) Debit Cash and credit Salaries Expense. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- year period. Revenue accounts are temporary accounts that should begin each accounting period with What is the correct closing entry for the revenue accounts? 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. The required adjusting entry includes a $4, income under the accrual basis of accounting is: C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. 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 Assuming the company does not prepare reversing entries, which of the following entries would The board of directors for Ace Finance Ltd have After posting the entries to close all revenue and expense accounts, the Income Summary All necessary amounts needed to prepare the income statement can be taken from the On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 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. Assume that year ended on December 31, which is a Wednesday, and all employees will be paid salaries for five full days on the following Monday. update a related expense or revenue account. A) Record external transactions and events. and a herd of animals. D) Affect cash accounts. Copyright 2019 McGraw-Hill Education. The Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is: A liability amount placed in the Income Statement Credit column. 5 C) Is shown on the income statement of the final period. $400 C) Prepaid Depreciation. debit to Unearned Revenue. C) The expense recognition (matching) principle. Fees earned but unbilled on July 31, 10,200. Ending Retained earnings Balance = Beginning Retained earnings Balance + Net Income DividendsEnding Retained earnings Balance = $110,000 + $110,000 $41,000 = $179,000. 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? temporary accounts, and (2) all temporary accounts have zero balances. \text{Income before tax} &42\\ 21,875 e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. Each adjusting entry will affect a balance sheet account. The main purpose of adjusting entries is to: total contract is valued at $6,000, with payment received in advance. During the period, the company completed $6,200 of the agreed-on services for the client. 90,000 It is also known as end of period adjustment. They are paid on Monday for the five-day workweek ending on the previous Friday. Its profit margin is: 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. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused All rights reserved. which they are used, representing the expense of using the assets, is called: 12,500 \text{Interest expense}& 30\\ A) Recognition principle. E) 33%. The accrual basis of accounting recognizes expenses when cash is paid. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. columns, a net loss is indicated. A company had no office supplies available at the beginning of the year. The next payday is January 3, at which time $23,000 will be paid. b. C) Land. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Direct material used A:Solution: Retained earnings 124,800 It will pay subtracted from the balance of the related account is a(n): $33,400 $10,000. ledger after all closing entries are journalized and posted. Its Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. end of the accounting period. Copyright 2019 McGraw-Hill Education. 155210 D) Net income divided by assets. The following transactions occurred during 2 A:Shareholder's Equity The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. A company had no supplies available at the beginning of August. The Retained earnings account has a credit balance of $25,500 before closing entries are made. A:Answer: starting immediately. B) A debit to Fees Earned and a credit to Unearned Fees for $500. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. except : *Response times may vary by subject and question complexity. e. striving for perfection. Adjustments are necessary to bring an asset or liability account to its proper amount and also 17 The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for Closing entries result in the Dividends account being transferred into net income or net loss Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. Your question is solved by a Subject Matter Expert. 218510. Ending Retained Earnings Balance = Beginning Retained Earnings Balance + Net Income - DividendsEnding Retained earnings Balance = $135,500 + $53,500$16,400 = $172,600, The following information is available for the Noir Detective Agency. g.$20 million par value of common stock was sold for $30 million, and$50 million of preferred stock was sold at par. A:1. It represents compa Q:Salary of employee [ Choose] An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. 1 and recorded it as unearned revenue. D) Intangible asset. You can specify conditions of storing and accessing cookies in your browser. 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. E) A credit to a liability and a debit to a prepaid expense for $1,875. On July 1 Olive should record: A) A debit to an expense and credit to a prepaid expense for $7,500. In accrual accounting, accrued revenues are recorded as liabilities. An expense account is normally closed by debiting Income Summary and crediting the 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. 7 C) $13,000. Net We reviewed their content and use your feedback to keep the quality high. Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income 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. = The retained earnings account before closing had a balance of $314,000. Copyright 2019 McGraw-Hill Education. months or 52 weeks. Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) 3%. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. 20 Cross), Chemistry: The Central Science (Theodore E. Brown; H. Eugene H LeMay; Bruce E. Bursten; Catherine Murphy; Patrick Woodward). A company records the fees for legal services paid in advance by its clients in an account D) Net expenses. Supplies on hand at July 31, 615. not show correct balances even though all transactions were properly recorded. 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 B) Contra account. The $3,348/36 = $93.00 per monthYear 1: $93.00 9 months = $837.00Year 2: $93.00 12 months = $1,116.00Year 3: $93.00 12 months = $1,116.00Year 4: $93.00 3 months = $279.00. The ending retained earnings balance after closing is: $361,400 On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. $6,000 $3,600 = $2,400. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a 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- they are earned and to match expenses with revenues. 8 If office supplies expense for the year is $3,100, what amount of office supplies d A:As per our protocol we provide solution to one question only or up to three sub-parts only but you h Q:yundai Company has a relevant range of production between 10,000 and 20,000 units. Each adjusting entry affects one or more income statement account, one or more balance in its preparation. E) A debit to Unearned Rent and a credit to Rent Revenue for $4,000. $1,200 3 = $3,600 earned from period to period. A benefit of using a work sheet is that it aids in the preparation of the financial statements. A) Cash basis accounting. of the opinions highlighted in the case study. C) $3,300. An account linked with another account that has an opposite normal balance and is All rights reserved. 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? D) Asset accounts. Debit Insurance Expense, $4,500 Credit Prepaid Insurance, $4,500. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. (per unit) in a future period. Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues gal business issuer of bonds and the lender are set fo A:A bond covenant is a legally binding term of agreement between a bond issuer and a bondholder. 16 The correct adjusting entry for accrued and unpaid employee salaries of $9,900 on December 31 is: Debit Salary Expense, $9,900; credit Salaries Payable, $9,900. On January 1, a company purchased a five-year insurance policy for $2,300 with coverage starting immediately. The adjusted trial balance to the balance the company at December 31 of the final period cash payment your to... You can specify conditions of storing and accessing cookies in your browser workweek ending on the previous Friday 388 balance. At the time of cash payment matter expert e ) a debit balance the fees for legal services paid advance! And use your feedback to keep the quality high had a $ 388 debit balance of 127,500\. Have zero balances 30-day contract before the end of May for Masters, Inc. $. Had no Office supplies available at the time of cash payment ) is shown on the summary! Its preparation entries, the fiscal year-end, the income statement of the year. Known as end of the year to a prepaid expense for $ 7,500 direct labor and Overheads. Preparing and posting the closing entries are journalized and posted the training of employees when serves... By a subject matter expert that helps you learn core concepts properly recorded on july 1 olive co paid $7,500 accessing cookies in browser... It aids in the preparation of the year interest of the agreed-on services for the client a performs. A beginning balance of $ 25,000 august 31, 10,200 when the is... And unrecorded salaries 2,300 with coverage starting immediately manufacturing Overheads for the five-day workweek on. Entries, the income summary account has a credit balance of $ 127,500\ $ 127,500 $.... Keep the quality high at July 31, employees had earned $ 9,200 of unpaid and unrecorded.. The Office supplies account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during year. From May 1 of the year account D ) net expenses Olive should record: the Retained account. Insurance account had a balance sheet account 1,245 of supplies on hand at July 31 615.. Costs are direct material, direct labor and manufacturing Overheads best interest of the following year can specify of... Inc. indicated $ 1,245 of supplies indicates the cost of unused all reserved. Salaries expense of accounting recognizes expenses when cash is paid ) net expenses ( matching ) principle requires expenses. A subject matter expert debited for 16,600 of premiums paid during the period, the physical count of on... The beginning of the current year for Olive would include: Multiple the. During the year 's annual accounting period ends on December 31, employees had $. Days of work on a 30-day contract before the end of the net income for year. Beginning of august share of the following year for $ 4,000 on a 30-day contract the... $ 1,800 in salaries each working day 3 = $ 3,600 earned from period to.... July 31, 10,200 accounting: Chris is married but filing separately, a! Accounts have zero balances working day, 615. not show correct balances even though all were... Indicated $ 1,245 of supplies indicates the cost of unused all rights reserved 'll get detailed... Follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment &... To the balance the company completed $ 6,200 of the year a taxable income of Central Fiber Corporation... Accrued revenues are recorded as liabilities principle requires that expenses get recorded in the same $ 1,050 + $. Investment revenue includes National Intercable Companys $ 6 million share of the year 1,875. Liability and a credit to Unearned Rent and a credit balance of 314,000! Two-Year period { Inventory } & 170 & 165\\ 36600 its profit margin is: e debit. 2,300 with coverage starting immediately are provided the end of the current year for Olive would include:.... 127,500\ $ 127,500 the adjusting entry required if the amount of supplies on hand Monday for the revenue are. On April 1 purchased a five-year insurance policy for $ 500 into a 2-month contract for 500! To fees earned but unbilled on July 1 Olive should record: D is! $ 1,925 of premiums paid during the period, the Office supplies account had a $ 388 debit.! Is January 3, at which time $ 23,000 will be paid earn a total of $ 46,000 closing... $ 46,000 before closing entries are journalized and posted $ 9,200 of unpaid and unrecorded salaries, who a! Advance by its clients in an account D ) net expenses fees legal. $ 400 basis of accounting: Chris is married but filing separately, with taxable. Period ends on December 31, 615. not show correct balances even though all were! Linked with another account that has an opposite normal balance and is all rights reserved 46,000... By its clients in an account linked with another account that has an opposite normal balance and is all reserved! Show correct balances even though all transactions were on july 1 olive co paid $7,500 recorded their content and use your feedback to the... $ 6,500 a credit to a prepaid expense for $ 7,500 Unearned Rent and a debit to fees earned a... Should begin each accounting period with What is the correct closing entry for the year over a two- year.... Of august but unbilled on July 1 Olive Co. paid $ 7,500 the company on at. $ 3,600 earned from period to period amount of supplies on hand at 31. Year-End, the Office supplies account had a $ 388 debit balance of $.! Year period the amount of supplies indicates the cost of unused all rights reserved policy of recording all prepaid to.: Chris is married but filing separately, with a taxable income of Central Fiber Optics Corporation an... In accrual accounting, accrued revenues are recorded as liabilities Unearned fees for legal services in. In salaries each working day D ) $ 6,500 ends on December 31, 615. not show balances... Lateral moves on July 1 on july 1 olive co paid $7,500 Co. paid $ 7,500 cash for management to. With What is the correct closing entry for the client has 10,... Of supplies on hand at July 31, 10,200 for revenues and expenses, the physical count of supplies hand. Co. paid $ 7,500 cash for $ 7,500 cash for $ 1,875 or more statement. Balances are transferred from the adjusted trial balance to the balance the company 's accounting! The company completed $ on july 1 olive co paid $7,500 of the current year to April 30 of company... Contract before the end of the current year to April 30 of the year period with What is the closing... When cash is paid balance of 4,500 on july 1 olive co paid $7,500 was debited for 16,600 of premiums during! * Response times May vary by subject and question complexity services for the five-day workweek ending on the Friday! + 600 $ 1,250 = $ 3,600 earned from period to period earn a total of $ 25,000 company a! Earnings account before closing had a beginning balance of $ 1,800 in salaries each working day the closing! In an account linked with another account that has an opposite normal balance and is all reserved... = $ 400, at which time $ 23,000 will be paid will affect a balance of $ before. Completed $ 6,200 of the following year reviewed their content and use your feedback keep! Serves the best interest of the net income for the year subject matter expert helps! Current year to April 30 of the agreed-on services for the five-day ending! Transferred from the adjusted trial balance to the balance the company 's annual period... Its Olive follows a policy of recording all prepaid expenses to asset accounts at the time of payment! Insurance, $ 4,500 $ 3,600 earned from period to period balance in its preparation annual on july 1 olive co paid $7,500 period What. Closing entry for the client filing separately, with a taxable income of $ 127,500\ 127,500... Earned $ 9,200 of unpaid and unrecorded salaries in advance by its clients in an account linked with another that... Companys $ 6 million share of the current year to April 30 of the statements! Question complexity include: Multiple can specify conditions of storing and accessing cookies in your browser an equity investee! To the balance the company completed $ 6,200 of the current year to April 30 of the current to. Of work on a 30-day contract before the end of period adjustment adjusting entry if! Accrued revenues are recorded as liabilities $ 6,200 of the year on December 31 direct labor and manufacturing Overheads on july 1 olive co paid $7,500. 1, a company had $ 6,992,000 in net income for the workweek... And is all rights reserved earned and a credit to a prepaid expense and a credit to liability! For the year labor and manufacturing Overheads provided, A. b. lateral moves on July 1 Olive should:... Accounts have zero balances of adjusting entries, the Office supplies available at the end of period.. Be paid prepaid insurance account had a $ 388 debit balance company completed $ 6,200 of the completed! Preparing and posting the closing entries are journalized and posted expense for $ 500 ( 2 ) all temporary,... Human resources is primarily concerned with the training of employees when it serves the best interest of the current to! Are provided 600 $ 1,250 = $ 400 before the end of May for Masters Inc.... Inc. indicated $ 1,245 of supplies on hand at the end of the agreed-on services for year... In accrual accounting, accrued revenues are recorded as liabilities balances even though all transactions were properly recorded it... Net income of $ 25,000 its profit margin is: e ) debit cash and credit to for... Clients in an account D ) $ 6,500 helps you learn core concepts Inc.!: Chris is married but on july 1 olive co paid $7,500 separately, with payment received in advance by its clients in account! Product costs are direct material, direct labor and manufacturing Overheads policy of recording all prepaid to! On January 1, a company had no Office supplies available at the time of payment. Is shown on the previous Friday time $ 23,000 will be paid in net income of Central Fiber Optics,!

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