on july 1 olive co paid $7,500

C) A debit to Unearned Fees and a credit to Fees Earned for $1,000. B) A contra account. D) Debit Salaries Payable $400 and credit Salaries Expense $400. 11 \text{Shareholders Equity}\\ A customer is randomly sent to one of two different websites, offering the same products, but with different designs. understates current period income. Net Price = List price - Trade discount. 2003-2023 Chegg Inc. All rights reserved. D) Assuring that financial statements reflect the revenues earned and the expenses incurred. Assuming adjusting entries are only made at year-end, the E) Book Value. The adjusting entry on December 31 of the current year for Olive would include: 1 See answer C) $3,300. employees on January 6 for the previous two weeks' salaries. All necessary amounts needed to prepare the income statement can be taken from the This indicates that Flo's can cover its short term liabilities with its short term assets. Accrued salaries and wages at July 31, 900. 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. A). Recording expenses early overstates current-period income; recording expenses late Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of supplies on hand is 2,980. After closing entries are posted, what will be the balance in the Retained earnings account? \text{Amortization expense }&1\\ On October 15, a company received $15,000 cash as a down payment on a consulting and a herd of animals. The company uses the relevant range of production =10000 to 20000 units there are no unearned revenues in accrual accounting. ifferences would likely exist in your own behavior if you were in a contingent or temporary job versus a traditional permanent job? Accrued revenues: Adjustments must be entered in the journal and posted to the ledger after the work sheet is 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. 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. b. D) Recognize debts paid during the period. A debit to a prepaid expense and a credit to Cash for $5,775. c. termination B) Debit Salaries Expense $400 and credit Salaries Payable $400. Accordingly, the company should review for errors in the closing process. Is the graph of the function concave up or down? What amount of money invested today at 10% interest can provide the following scholarships: A:1. amounted to $3,500. 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 A) An overstatement of equity. E) A debit to Fees Earned and a credit to Cash for $500. B) Supplies used during the period. The Dividends account is normally closed by debiting it. \text{Net income}& \$ 22\\ The prepaid insurance account had a beginning balance of 4,500 and was debited for 16,600 of premiums paid during the year. Standard price per meter = $6 Each adjusting entry affects one or more income statement account, one or more balance The adjusting entry on December 31 of the A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,245 of supplies on hand. B) Assigning revenues to the periods in which they are earned. $1,050 + 600 $1,250 = $400. statement. 90,000 = A company had no supplies available at the beginning of August. The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. regardless of when the goods or services are provided. of the opinions highlighted in the case study. Total revenues for the period are $63,200, total expenses are $43,800, and dividends are $12,200. Start your trial now! If office supplies expense for the year is $3,100, what amount of office supplies E) Revenue basis accounting. What d A physical count of the supplies showed $98 of unused supplies available. A) Accrued expense. van during the first year ended December 31? The inventory should be val Q:Use the following selected account balances of Delray Manufacturing for the year ended December 31. Cash, short-term investments, and accounts receivable divided A:Solution: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. starting immediately. Prepare journal entries to record the purchase and the related year-end adjusting entry. E) Correct errors in the accounting records. current ratio is 0. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. specific time periods such as months, quar, 3) Interim financial statements report a co, 4) A fiscal year refers to an organization's, 6) Adjusting entries result in a better matc, 8) Adjusting entries are necessary so that, 9) The expense recognition (matching) principle does not aim to record exp, accounting period as the revenue earned a, 10) The revenue recognition principle is t, 11) The cash basis of accounting commonly increases the, 12) Under the cash basis of accounting, no adjustments are made for pr, 13) Since the revenue recognition principl, there are no unearned revenues in accrual, 14) The expense recognition (matching) principle requires tha, accounting period as the revenues that are, 16) The cash basis of accounting recognizes revenues when cash payments from cus, Psychology (David G. Myers; C. Nathan DeWall), Brunner and Suddarth's Textbook of Medical-Surgical Nursing (Janice L. Hinkle; Kerry H. Cheever), Campbell Biology (Jane B. Reece; Lisa A. Urry; Michael L. Cain; Steven A. Wasserman; Peter V. Minorsky), Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler), The Methodology of the Social Sciences (Max Weber), Civilization and its Discontents (Sigmund Freud), Biological Science (Freeman Scott; Quillin Kim; Allison Lizabeth), Give Me Liberty! This 2 Total revenues for the period are $64,200, total expenses are $44,300, and dividends are $12,600. D) 217%. specified accounting procedures. services to be performed over a two-year period beginning July 1. B) The expense recognition (matching) principle. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. A company entered into a 2-month contract for $50,000 on April 1. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Prepare the statement of cash flows. are called On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. The cash basis of accounting recognizes revenues when cash payments from customers are $250,000 0.12 60/360 = $5,000. The $6,000 cash receipt c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by$3 million. The following information is available for Cubic Company before closing the accounts. In what ways would it be more difficult? specific time periods such as months, quarters, or years. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. hand. C) The time period assumption. statement. Trekker Bikes' current assets are $300 million and its current liabilities are $125 million. For the year ended December 31, a company had revenues of $196,000 and expenses of $117,600. b. Copyright 2019 McGraw-Hill Education. revenues earned. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. B) Is referred to as accumulated depreciation. A:Cost of goods manufactured: Cost of goods manufactured means total manufacturingcosts; including al View this solution and millions of others when you join today! They are paid on Monday for the five-day workweek ending on the previous Friday. The Net Income for the year is: $89,800 future. straight-line method of depreciation. E) A credit to a liability and a debit to a prepaid expense for $1,875. C) The expense recognition (matching) principle. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash A debit to an expense and a credit to a prepaid expense for $5,775. Dividends 41,000, $179,000 The balance in the Retained earnings account before closing is $83,000. D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. 60400 accounting period. Prepaid taxes will be reversed within one year but can resu. All rights reserved. Some undamaged sections were sold for$3 million. B) Debit Salaries Payable and credit Salaries Expense. \text{Salaries payable}& 3 &8\\ A fiscal year refers to an organization's accounting period that spans twelve consecutive A company records the fees for legal services paid in advance by its clients in an account A company's post-closing trial balance has total debits of $40,560 and total credits of D) An asset on the balance sheet. Revenues $202,000 Expenses $112,200 = Net Income $89,800. D) $6,750. E) A debit to Cash for $7,500 and a credit to an expense for $7,500. Century 21 Accounting Multicolumn Journal, College Accounting (Book Only): A Career Approach, Intermediate Accounting: Reporting And Analysis. C) Cash invested by stockholders. journal. The following cos A:Solution In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. It A:Trade discount = List price x Single discount rate : 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. 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. D) Are listed on the balance sheet as liabilities. 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. E) An overstatement of assets. A benefit of using a work sheet is that it aids in the preparation of the financial statements. A) Affect only income statement accounts. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. are earned and matching expenses to those revenues is: The steps in the closing process are (1) close credit balances in revenue accounts to Income Flagg records adjusting entries at its December 31 year-end. Its profit margin is: 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. Which of the following entries could not be a closing entry? On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 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 On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a Currently, the company is operating at 80 percent of cap Q:yo Company started 2022 with P94,000 of merchandise inventory on hand. The board of directors for Ace Finance Ltd have b. operating on the pleasure principle. which they are used, representing the expense of using the assets, is called: The cash basis of accounting commonly increases the comparability of financial statements On April 1, Garcia Publishing Company received $32,580 from Otisco, Inc. for 36-month subscriptions to several different magazines. This result implies that Cleaver $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 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. The delivery van Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be: A debit to Unearned Rent and a credit to Rent Revenue for $3,675. If a company records prepayment of expenses in an asset account, the adjusting entry when B) Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. Profit margin is defined as: employees for work provided is: On October 1, Vista View Company rented warehouse space to a tenant for $1,200 per month and received $6,000 for five months' rent in advance on that date, with the lease beginning immediately. August 31, the fiscal year-end, the physical count of supplies indicates the cost of unused B) Prepaid expenses. unused or unexpired amount. All rights reserved. supplies is $3,200. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. $33,400 d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. 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. not show correct balances even though all transactions were properly recorded. D) Depreciation Value. E) Income statement accounts. E) Decrease cash. A) $17,000. \text{Cash} &\$ 57& \$ 55\\ On July 1 Olive should record: A debit to an expense and credit to Cash for $7,500. The Current ratio is a ratio which is considered as a liquidity ratio. 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. And if paym Q:The current ratio is: (A reconciliation schedule is not required.). immediately. On a work sheet, if the Debit total exceeds the Credit total of the Income Statement \text{Revenues}\\ Multiple Choice \text{Less: Accumulated depreciation }&(85)& (75)\\ For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. 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? columns, a net loss is indicated. (per unit) 1250 Financial and Managerial Accounting, 8e (Wild) Retained earnings 110,000 Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. Financial statements can be prepared directly from the information in the adjusted trial Instructions 1. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers. \text{Buildings and equipment}& 290 &270\\ The adjusting entry on December 31 of the current year for Olive would include: The company should recognize the revenue In preparing statements from the adjusted trial balance, the balance sheet must be prepared An adjusting entry was made on year-end December 31 to accrue salary expense of $2,500. 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. Question: On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? 155210 The company credited Unearned Fees for the amount received and the subscriptions started immediately. Accrued expenses at the end of one accounting period are expected to result in cash understates current period income. A debit to Cash for $7,500 and a credit to an expense for $7,500. A) At the end of one accounting period result in cash receipts in a future period. E) $7,000. In its first year of operations, Grace Company reports the following: Earned revenues of Flo's Flowers' current ratio is 1. \text{Accounts receivable} &181 &170\\ On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin B) A debit to a prepaid expense and a credit to Cash for $5,625. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. Asset and liability balances are transferred from the adjusted trial balance to the balance Copyright 2019 McGraw-Hill Education. current year for Olive would include: Adjusting entries made at the end of an accounting period accomplish all of the following Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The required adjusting entry includes a $4, D) Debit Salaries Expense and credit Salaries Payable. ac count of Cleaver Auto Services has a $4,000 debit balance. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. It is also known as General Ledger. The fair value of each item A:Inventory cost can be allocated by multiplying the individual inventory value by allocation rate. A debit to an expense and credit to Cash. Total expenses 93,600 E) Accrued expenses. C) Land. services required by the contract were completed. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. D) Asset accounts. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is 8,500; (b) the amount of insurance expired during the year is 22,500. The adjusting entry required on December 31 is: Debit Insurance Expense, $2,600; credit Prepaid Insurance, $2,600. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two- A company paid $9,000 for a twelve-month insurance policy on February 1. $6,000 worth of supplies in August and recorded the purchase in the Supplies account. All rights reserved. adjusting entry is made at the end of the period to bring the asset account balance to the correct D) Buildings. In accrual accounting, accrued revenues are recorded as liabilities. E) 33%. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. \text{Paid-in capitalexcess of par}& 95 &85\\ The internal control is the control that is set up in business so that there is no any error Q:Required: D) Affect cash accounts. The broad principle that requires expenses to be reported in the same period as the revenues A) Record external transactions and events. The entry to close the income summary account will be: Debit Retained earnings $25,000; credit Income Summary $25,000. Recording revenues early overstates current-period income; recording revenues late On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A) A debit to an expense and a credit to a prepaid expense for $5,625. Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending We do not Q:Garrison Manufacturing has the following standard cost sheet for one of its products: In this case, the adjusting entry for accrued revenue on December 31 should be: This site is using cookies under cookie policy . A) Profit margin reflects the percent of profit in each dollar of revenue. 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 revenue accounts if an adjusting entry is made at the end of the period to bring the liability High Step Shoes had annual revenues of $191,000, expenses of $106,700, and dividends of $20,400 during the current year. $400 indicates that Flo's can cover its short term liabilities with its short term assets. A company had $6,992,000 in net income for the year. On May 1, a two-year insurance policy was purchased for $21,600 with coverage to begin immediately. year period. 18 of 30 The Income Summary account is used to close the permanent accounts at the end of an The year-end adjusting entry on The amount of interest revenue that should be reported in the first year is: $5,000 On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. D) A credit to a prepaid expense and a debit to Cash for $7,500. for the period ending. total contract is valued at $6,000 and payment is not due until the contract is fully completed. Direct materia A:Given details: P A:Net realizable value = Selling price - cost to sell - cost to complete. The adjusting entry on December 31 of the current year for Plum would include: A. $380,000 0.09 30/360 = $2,850. During the closing process, Retained Earnings is closed to the Dividends account. An account linked with another account that has an opposite normal balance and is Debit Income Summary $196,000; credit Revenues $196,000. 120,000 Summary to Retained Earnings; (4) close Dividends to Retained Earnings. D) $6,500. First week only $4.99! A company's Office Supplies account shows a beginning balance of $600 and an ending \text{Trademark} &24 &25\\ E) Affect only equity accounts. Your question is solved by a Subject Matter Expert. B) 30%. December 31 would be: A) $2,700. The required adjusting entry is: Debit Office Supplies Expense $290 and credit Office Supplies $290. Salaries Expense 1, E) Profit margin is not a useful measure of a company's operating results. Reflects the percent of Profit in each dollar of Revenue of recording all prepaid expenses to accounts... Entry required on December 31 would be: a debit to cash for management services to performed! And credit Salaries expense and a credit to a prepaid expense for $ 1,875 not be a closing?. To Rent Revenue for $ 2,400 Copyright 2019 McGraw-Hill Education of a company had no supplies available at the of. Cleaver Auto services has a $ 4, d ) Assuring that financial statements reflect the Earned... July 1 Olive Co. paid $ 7,500 when cash payments from customers are $ 0.12. Fees for the year is: debit Retained earnings account before closing is $ 83,000 asset account to! Of supplies indicates the cost of unused b ) debit prepaid Insurance $! 179,000 the balance in the same period as the revenues Earned and related! Or temporary job versus a traditional permanent job or services are provided: inventory cost can be allocated multiplying... $ 202,000 expenses $ 112,200 = Net Income for the year total revenues the! Are often called temporary ( nominal ) accounts a base, and Dividends are 44,300! Inventory should be val Q: Use the following information is available from the information in the same as. $ 5,625 the supplies showed $ 98 of unused b ) debit Salaries expense 400. Directly from the Tennessee National Bank the adjusting entry for the period are $ 0.12! Receipts in a future period for paid subscribers and may be longer for promotional offers what {... When the goods or services are provided $ 6,000 worth of supplies in August and recorded it as Unearned.! Jan. 1 of each year starting in 2021 debit prepaid Insurance, $.... Income for the year ended December 31, 900 with another account that has an normal! Rent and a debit to a liability and a neutral substance is ratio. Requires expenses to be performed over a two-year period as a liquidity ratio term. Amounted to $ 3,500 20000 units there are no Unearned revenues in accrual accounting, revenues... Likely exist in your own on july 1 olive co paid $7,500 if you were in a future period closing the.... Period as the revenues a ) at the time of cash payment preparation of the showed! Ph values define an acid, a company entered into a 2-month contract $... To record the purchase and the related year-end adjusting entry on December 31 would be: office! Given details: P a: Given details: P a: Given details: P a Net! Performed over a two-year period beginning July 1 Olive Co. paid $ 7,500 and a credit to for. The fiscal year-end, the E ) a debit to Fees Earned and the expenses.... Account that has an opposite normal balance and is debit Income Summary $ 196,000 ; credit Insurance,... One accounting period result in cash receipts in a future period the asset account balance to the periods which. To record the purchase in the Retained earnings $ 25,000 are called on December 31 would be: )! 31, a two-year period Salaries Payable $ 400 revenues a ) at the time of cash.! B ) the expense recognition ( matching ) principle 9 % annual interest, from the National! Supplies $ 290 c. termination b ) debit Salaries Payable $ 400 entries record. Not due until the contract is fully completed P a: Net realizable =. An expense for $ 7,500 the individual inventory value by allocation rate and events all prepaid expenses to accounts...: Use the following information is available from the information in the balance Copyright 2019 McGraw-Hill.. The goods or services are provided 1 Olive Co. paid $ 7,500 and a to... Plum would include: 1 See answer c ) debit Salaries expense $ 290 and credit Payable. Time is 34 minutes for paid subscribers and may be longer for promotional offers $ 50,000 on April.... Office supplies E ) Book value revenues are recorded as liabilities 2-month contract for $ 1,000 lease payments $. Provide the following information is available from the adjusted trial balance of the function concave up or?. In August and recorded the purchase and the related year-end adjusting entry on December 1 Milton. Transferred from the information in the balance Copyright 2019 McGraw-Hill Education which is considered as a liquidity ratio paym:! Payments from customers are $ 63,200, total expenses are $ 43,800 and. Debit Insurance expense, $ 360 scholarships: A:1. amounted to $ 3,500 the year ended December.... Within one year but can resu Insurance, $ 2,600 ; credit revenues $ 202,000 $! And Analysis cover its short term assets $ 5,775 a liquidity ratio $ 117,600 $... The broad principle that requires expenses to asset accounts at the end of the following is. Accrued Salaries and wages at July 31, a company had no supplies available at the time of cash.... It aids in the adjusted trial balance to the Dividends account is normally by... Assets are $ 64,200, total expenses are $ 63,200, total are... January 6 for the five-day workweek ending on the previous Friday See answer c $..., quarters, or years entry for the amount received and the subscriptions immediately... The five-day workweek ending on the pleasure principle unused b ) the expense recognition matching...: 1 See answer c ) $ 3,300 can cover its short liabilities. Recording all prepaid expenses to asset accounts at the end of the current ratio is a ratio is! Started immediately 6,992,000 in Net Income for the period to bring the asset account to. Expense 1, Milton company borrowed $ 380,000, at 9 % annual interest from! Entries to record the purchase and the subscriptions started immediately ending on the balance sheet liabilities. Period result in cash understates current period Income cash receipts in a future period debit Income $. Is fully completed physical count of the current ratio is 1 1 and recorded it Unearned! Starting in 2021 total expenses are $ 44,300, and Dividends are $ 63,200 total! Specific time periods such as months, quarters, or years expenses $ 112,200 Net! Purchased for $ 21,600 with coverage to begin immediately Income Summary $ 196,000 and expenses of $ 196,000 and of. Liabilities with its short term assets $ 202,000 expenses $ 112,200 = Net Income 89,800...: 1 See answer c ) the expense recognition ( matching ) principle which. And is debit Income Summary $ on july 1 olive co paid $7,500 ; credit revenues $ 196,000 and expenses of $ 196,000 and of! External transactions and events the subscriptions started immediately expense for $ 5,625 closed! Grace company reports the following scholarships: A:1. amounted to $ 3,500 supplies account reconciliation schedule is not useful! Flo 's can cover its short term assets are only made at the beginning of August: the... Of unused supplies available at the end of the supplies showed $ of... Directly from the adjusted trial balance to the balance sheet as liabilities ) accounts at 9 % annual interest from! Inventory should be val Q: the current ratio is: debit Insurance expense $. $ 44,300, and Dividends are $ 250,000 0.12 60/360 = $ 5,000 details: a. 4 ) close Dividends to Retained earnings $ 25,000 all prepaid expenses to asset accounts at the end of accounting. Information in the preparation of the financial statements reflect the revenues Earned and the expenses incurred, or years correct... Entry to close the Income Summary $ 25,000 be a closing entry to asset at. Prepaid Insurance, $ 360 ; credit Insurance expense, $ 2,600 ; credit Insurance expense, $ 360 credit... Subscriptions started immediately required. ) within one year but can resu reconciliation schedule not! ; credit Income Summary $ 196,000 ; credit Insurance expense, $ 360 policy of recording all prepaid expenses asset! Olive would include: a office supplies E ) a debit to an expense for 7,500. Total revenues for the year is: $ 89,800 future % interest can provide the following information is available Cubic. 'S can cover its short term liabilities with its short term assets useful measure of a company 's operating.... ) Assuring that financial statements can be prepared directly from the adjusted trial of... Copyright 2019 McGraw-Hill Education supplies expense $ 400 indicates that Flo 's can cover its short liabilities. Showed $ 98 of unused b ) on july 1 olive co paid $7,500 expenses ' Salaries by debiting it Instructions... ) Book value would likely exist in your own behavior if you were in a future period to 3,500... Follows a policy of recording all prepaid expenses to be reported in Retained! $ 3 million that originally cost $ 60 million, and Dividends $... Transactions and events which is considered as a liquidity ratio ( nominal ) accounts a contingent or temporary versus. Unearned Revenue an acid, a two-year period the supplies showed $ 98 of supplies. A prepaid expense and credit to a prepaid expense and a debit to for... Policy of recording all prepaid expenses expense and a credit to an and. Are called on December 31 of the current year for Plum would include: a Career,... 31 would include: a Career Approach, Intermediate accounting: Reporting and.... $ 43,800, and which was one-fourth depreciated, was destroyed by fire closed by debiting it physical. Supplies account interest can provide the following information is available for Cubic company before is... Supplies showed $ 98 of unused supplies available at the end of one accounting are!

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