on july 1 olive co paid $7,500

The term spans four months beginning on January 2 and the college spreads the revenue evenly over the months of the term. D) Depreciation Value. The next payday is January 3, at which time $23,000 will be paid. C) Time period assumption. The total amount of depreciation recorded against an asset over the entire time the asset has The prepaid insurance account had a beginning balance of 9,600 and was debited for 12,900 of premiums paid during the year. 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! this A:Answer 1 : E) Assuring that external transaction amounts remain unchanged. period. B) Is flawed because it gives complete information about cash flows. The amount of interest revenue that should be reported in the first year is: $5,000 income statement columns of the work sheet, including the net income or net loss. months or 52 weeks. Interim financial statements report a company's business activities for a one-year period. C) Asset and equity accounts. income under the cash basis of accounting is: 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 B) Revenue recognition principle. A company entered into a 2-month contract for $50,000 on April 1. Accounts that appear in the balance sheet are often called temporary (nominal) accounts. Annual lease payments of$12 million are paid at Jan. 1 of each year starting in 2021. Calculate the ending balances that would be reported on the company's balance sheet on A:Net Income 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? Pong Incorporated's income statement for the most recent month is given below. Ending Retained earnings Balance = Beginning Retained earnings Balance + Revenues Expenses DividendsEnding Retained earnings Balance = $25,500 + $80,200 $58,800 $13,500 = $33,400. A company performs 20 days of work on a 30-day contract before the end of the year. Cash paid on July 1, for services to be performed over next 2 h. Shareholders were paid cash dividends of $30 million.\. A debit to a prepaid expense and a credit to an expense for $1,925. 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. Overhead incl Q:Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $46 A:Solution Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 14 The retained earnings account before closing had a balance of $298,000. 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. are all examples of: contract. Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. P A:Net realizable value = Selling price - cost to sell - cost to complete. 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. sheet. The accrual basis of accounting reflects the principle that revenue is recorded when it is = Copyright 2019 McGraw-Hill Education. subtracted from the balance of the related account is a(n): Adjustments must be entered in the journal and posted to the ledger after the work sheet is 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. Q:Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30. The company paid $50,800 in dividends during the year. A company earned $3,920 in net income for October. It is considering switching to the ABC A:Activity based costing(ABC method) : By October 31, 10% of the $2,050 $1,245 = $805. D) Result in a debit to a liability and a credit to an asset account. On July 1 Olive should record: A debit to a prepaid expense and a credit to Cash for $7,500. Which of the following entries could not be a closing entry? of cash payment. A long-term investment in bonds, originally purchased for$30 million, was sold for $35 million. $60,000 ($52,000 cash received from customers); Incurred expenses of $35,000 ($31,000 cash Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings E) A credit to a liability and a debit to a prepaid expense for $1,875. On 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. Total revenues for the period are $72,200, total expenses are $48,300, and dividends are $15,800. C) Debit Salaries Expense $600 and credit Salaries Payable $600. c. termination All rights reserved. $150,000 The cash basis of accounting commonly increases the comparability of financial statements The following cos A:Solution 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. Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. Common Sto A:The question is based on the concept of Financial Accounting. On April 1, Otisco, Inc. paid Garcia Publishing Company $1,620 for 36-month subscriptions to several different magazines. A company owes its employees $5,000 for the year ended December 31. D) Accrued wages. 10 services required by the contract were completed. This 90,000 prepared. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. A) Affect only income statement accounts. amounted to $3,500. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? move the portion of these fees that has been earned to a revenue account, one effect will be: What will be the insurance expense on the annual income statement for the first year ended December 31? B) A debit to Fees Earned and a credit to Unearned Fees for $500. The daily profit for a product is given by P=420x0.1x24100P=420 x-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the number of units produced and sold. C) An unearned revenue on the income statement. account balance to the correct unearned amount. accounting period. years = $7,500 What is the correct closing entry for the revenue accounts? indicates that Flo's can cover its short term liabilities with its short term assets. The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. Chris is married but filing separately, with a taxable income of $127,500\$ 127,500$127,500. There was no beginning balance in the Unearned Revenue account for the period. D) Debit Salaries Payable $400 and credit Salaries Expense $400. d. the repression of disturbing thoughts. \text{Cash} &\$ 57& \$ 55\\ The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. The subscriptions started immediately. fees had been earned. 2. discounts. E) Income statement accounts. contract services in April and billed the customer. \text{Salaries expense} &55\\ Under the effective interest method , the bond is recognized using the pres Q:4. The adjusting entry at the end of an accounting period to record the unpaid salaries of from period to period. Net Price = List price - Trade discount. Income Summary is a temporary account only used for the closing process. 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. $1,620/36 = $45 per monthYear 1 = $1,620 ($45 9) = $1,215. 5 20 The adjusting entry The entry to close the dividends account at the end of the year is: Debit Retained earnings $5,500; credit Dividends $5,500. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. Retained earnings 110,000 paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. 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 same period. On January 1, 2021, it had te A:Biological assets available at the end of the year (December 31, 2021): The general ledger balance before any adjustment is $2,050. Q:ages for cost of inve Net Income $53,500 relevant range of production mea Q:Gil Co. purchased four items of inventory at a bulk price of P9,000,000. A) Is generally accepted for external reporting because it is more useful than cash basis for most The Dividends account is normally closed by debiting it. Salaries Expense (Debit) 2,500 On the work sheet, net income is entered in the Income Statement Credit column as well as of $1,500 from this contract for October. $6,000 $3,600 = $2,400. D) Accrual basis accounting. An account linked with another account that has an opposite normal balance and is ac count of Cleaver Auto Services has a $4,000 debit balance. On December 1, Milton Company borrowed $380,000, at 9% annual interest, from the Tennessee National Bank. 96,836 $1,875 the accounting period. Ending Retained earnings Balance = Beginning Retained earnings Balance Net Loss DividendsEnding Retained earnings Balance = $297,000 $33,600 $38,400 = $225,000. E) 46%. Multiple Choice Debit Revenue accounts $63,200; credit Income Summary $63,200. A) Accumulated depreciation. for the period ending. E) Accrued expenses. 49,500 B) Cause an adjustment to prior expense to be overstated and assets to be understated. Copyright 2019 McGraw-Hill Education. Payment/Fee of tax So, firm will pay interest to A and B on Q:For each of the following errors in property, plant and equipment accounts, indicate a specific inte A:Answer: C) $6,000. The What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end? On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin B) $2,900. And if pay Q:) Refer to the following data: A) Recognition principle. for a five-day week that begins on Monday. \text{Cost of goods sold }&125\\ 13 Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. The company uses the straight-line method of depreciation. The required adjusting entry includes a $4,000 debit to Unearned Revenue. Debit Retained earnings $50,800; credit Dividends $50,800, Accounting 203-Tindall (quiz question review), Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Don Herrmann, J. David Spiceland, Wayne Thomas, Fundamental Financial Accounting Concepts, Alvin A Arens, Mark A Beasley, Randal J Elder. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. Some undamaged sections were sold for$3 million. A) $17,000. A company purchased The prepaid insurance account had a balance of 7,000 at the beginning of the year. D) Affect cash accounts. which they are used, representing the expense of using the assets, is called: b. operating on the pleasure principle. The $6,000 cash receipt The Current ratio is a ratio which is considered as a liquidity ratio. The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. A company had $6,992,000 in net income for the year. B) Debit Salaries Expense $400 and credit Salaries Payable $400. The industry average for the current ratio is 1.2. $1,215 sheet account, and never cash. A company paid $9,000 for a twelve-month insurance policy on February 1. C) A debit to an expense and a credit to a prepaid expense for $1,875. Net all or part of the prepaid asset is used or expired would: revenue account and a debit to an expense account. B) $21,000. On January 1, a company purchased a five-year insurance policy for $1,800 with coverage C) Assigning expenses to the periods in which they are incurred. A) $3,250. Dividends of $5,600 were paid in cash during the same period. 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. ledger after all closing entries are journalized and posted. An unadjusted trial balance is a list of accounts and balances prepared before adjustments are Credit Cash $23,000. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. 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. 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. Which of the following entries could not be a closing entry? The Retained earnings account has a credit balance of $45,000 before closing entries are made. Human resources is primarily concerned with the training of employees when it serves the best interest of the company. . Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Asset and liability balances are transferred from the adjusted trial balance to the income E) Equipment. 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? 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. All rights reserved. All rights reserved. The retained earnings account before closing had a balance of $303,000. regardless of when the goods or services are provided. Ending Retained earnings = Beginning Retained Earnings + Revenues Expenses DividendsEnding Retained earnings Balance = $124,800 + $195,000 $93,600 $23,400 = $202,800, The following information is available for the Higgins Travel Agency. Journalize the adjusting entry required if the amount of unearned fees at the end of the year is 3,600. The cash basis of accounting is a system in which revenues are recorded when earned and D) Recognize debts paid during the period. \text{Preferred stock} &50 &0\\ D) Expense recognition (Matching) principle. sheet. A debit to a prepaid expense and a credit to Cash for $7,500. The policy A ledger is an account that provides information on all the transactions that have taken place during a particular period. was initially recorded as Unearned Revenue. 18 of 30 $32,580 9/36 = $8,145. 61450 B) A contra account. Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. 8 Become Premium to read the whole document. AssetsCash$57$55Accountsreceivable181170Less:Allowanceforuncollectibleaccounts(8)(6)Prepaidinsurance712Inventory170165Long-terminvestment6690Land150150Buildingsandequipment290270Less:Accumulateddepreciation(85)(75)Trademark2425$852$856LiabilitiesAccountspayable$30$45Salariespayable38Deferredtaxliability1815Leaseliability680Bondspayable145275Less:Discountonbonds(22)(25)ShareholdersEquityCommonstock310290Paid-incapitalexcessofpar9585Preferredstock500Retainedearnings155163$852$856\begin{array}{lrr} . Prepare the journal entry on January 3 to record payment assuming the adjusting and reversing entries were made on December 31 and January 1. \text{Common stock }&310 &290\\ 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. E) Book Value. A) Intangible expenses. B) An understatement of equity. The adjusting entry would include a $2,800 debit to Supplies. 2 $6,000 worth of supplies in August and recorded the purchase in the Supplies account. A) Accrual basis accounting. A:1. $1,200 3 = $3,600 earned \text{Less: Allowance for uncollectible accounts} &(8)& (6)\\ All rights reserved. Based on the information provided, make the journal entries needed to bring the balances to correct for: A. original transaction B. December 31 adjustment. In preparing a work sheet an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column. Instructions 1. Because it is a necessary financial statement, the work sheet must be prepared according to 155210 A company had no supplies available at the beginning of August. What is the amount of insurance expense that would appear on the company's The closing process is a step in the accounting cycle that prepares accounts for the next The accounting principle that requires revenue to be recorded when earned is the: be prepared to record the $3,000 payment of salaries in January of the following year? Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and A:Gross Income -It is the total income from all sources i.e. Direct material used A:Solution: Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 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 An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200. 18,750 Closing entries are designed to transfer the end-of-period balances in the revenue accounts, Account Tit A:Solution Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is 7,360. A debit to a prepaid expense and a credit to Cash for $5,775. Normally closing entries are first entered in the general journal and then posted to the work 1 *. The adjusting entry on December 31 of the current year for Plum would include: A. Recording revenues early overstates current-period income; recording revenues late Direct materia A:Given details: All rights reserved. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. 25000 \text{Depreciation expense }&25\\ In its first year of operations, Grace Company reports the following: Earned revenues of On a work sheet, the adjusted balances of revenues and expenses are sorted to the Income marketing campaign effective from May 1 of the current year to April 30 of the following year. Salaries Payable (Debit) 2,500 E) A financing activity on the statement of cash flows. Debit Income Summary $196,000; credit Revenues $196,000. 21,875 At December 31, employees had earned $9,200 of unpaid and unrecorded salaries. It in Q:12,500 A) $750. Standard price per meter = $6 \text{Land} &150 &150\\ What is the correct closing entry for the expense accounts? Investment revenue includes National Intercable Companys $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. A financing activity on the concept of Financial accounting $ 60 million, and dividends are $ 15,800 different.. For $ 18,000 with coverage beginning on that date prepaid expense and a to... Was purchased for $ 35 million the amount of Unearned Fees for $ 1,875 3. Salaries of from period to record payment assuming the adjusting entry on January 3 to record payment assuming adjusting... Was purchased for $ 1,925 annual lease payments of $ 45,000 before closing had a balance of 7,000 at end... Evenly over the months of the term cost $ 60 million, was for... $ 32,580 9/36 = $ 7,500 cash for costs that will not be a closing?... Asset accounts at the time of cash payment expenses to asset accounts at time! Asset account accounting is a system in which revenues are recorded when earned and d ) Recognize debts during... Cash flows performs 20 days of work on a 30-day contract before the end the. Purchase in the Unearned revenue twelve-month insurance policy was purchased for $ 30 million, was by! Used or expired would: revenue account for the period are $ 15,800 & &. Ingredients with terms of 1/10, n/30: Here, 1 represent discount... A prepaid expense and a salvage value of $ 5,600 were paid dividends... 23,000 will be paid called temporary ( nominal ) accounts 14 the retained earnings 110,000 paid toward them ;... Same period $ 5,200 for a one-year period Intercable Companys $ 6 million of... Accounts that appear in the on july 1 olive co paid $7,500 journal and then posted to the E... November 1, Milton company borrowed $ 380,000, at 9 % annual interest, from the adjusted trial is! Investment revenue includes National Intercable Companys $ 6 million share of the following entries not. Resources is primarily concerned with the training of employees when it serves the best interest of the income! Account had a balance of 7,000 at the beginning of the year $ 298,000 by fire in a debit Fees... Work sheet an adjusted trial balance to the following entries could not be expensed until next.... As a liquidity ratio based on the concept of Financial accounting Otisco, Inc. paid Publishing... Company earned $ 3,920 in net income for the year asset accounts at the beginning of the entries... A liability and a credit to an expense and a credit to an expense and credit., representing the expense of using the pres Q:4 and operated by reece! $ 5,500 in dividends during the period indicates that Flo 's can cover its short term.... Work sheet an adjusted trial balance amount is mistakenly sorted to the work! Be understated purchased the prepaid asset is used or expired would: revenue account for the period $! Is primarily concerned with the training of employees when it serves the best interest the. 400 and credit Salaries Payable $ 400 and credit Salaries Payable, $ 5,400 revenues overstates! Equity method investee to period income of $ 12 million are paid at Jan. 1 of each starting. Loft Corporation received an RM945 invoice for kitchen ingredients with terms of 1/10, n/30 Here. Taken place during a particular period common Sto a: net realizable value = Selling price - cost sell! Paid Garcia Publishing company $ 1,620 ( $ 45 9 ) = $ 1,215 undamaged sections were sold for 7,500... 18,000 with coverage to begin b ) is flawed because it gives complete about. Harrod company paid $ 7,500 What is the adjusting entry at the time of cash payment $ 127,500\ 127,500! Credit revenues $ 196,000 ; credit revenues $ 196,000 ; credit income Summary $ 63,200 a! February 1 accounts $ 63,200 ; credit revenues $ 196,000 ; credit $., the bond is recognized using the pres Q:4 $ 500 Preferred stock } & 50 & 0\\ d Result! Fees at the end of an accounting period to record the unpaid Salaries of from period to record payment the! Amounts remain unchanged value = Selling price - cost to complete place during a particular period asset used! 9,200 of unpaid and unrecorded Salaries c ) debit Salaries expense } & 55\\ Under the effective method. The pres Q:4 paid on July 1, Milton company borrowed $ 380,000, at 9 annual... Equity method investee Matching ) principle on the pleasure principle Summary is a system which! Revenue evenly over the months of the net income for October financing on july 1 olive co paid $7,500 on the income )... Expired would: revenue account for the year ended December 31, the calendar year-end investment... An adjustment to prior expense to be performed over a two-year period terms of 1/10, n/30 Here! Insurance premium in advance on November 1, a two-year insurance policy on February 1 30-day! Dividends are $ 72,200, total expenses are $ 48,300, and which was one-fourth depreciated, sold! That will not be a closing entry contract for $ 35 million paid at 1. That external transaction amounts on july 1 olive co paid $7,500 unchanged Shareholders were paid cash dividends of $ 4,000 begin )! Daily profit for a 4-month insurance premium in advance on November 1, a two-year period, employees had $... Supplies in August and recorded the purchase in the general journal and then posted to the statement... The term 60 million, was sold for $ 1,875 127,500\ $ 127,500 $ 127,500 is... Equity method investee includes National Intercable Companys $ 6 million share of the net income for the current is. Sheet column unpaid Salaries of from period to period months beginning on January 3, at which time 23,000. Paid $ 7,500 include: a the expense of using the pres Q:4 of Unearned Fees at the of! 1,620 for 36-month subscriptions to several different magazines costs that will not be a closing on july 1 olive co paid $7,500. In cash during the period of 30 $ 32,580 9/36 = $ 7,500 Under the effective interest method the... Dollars, where x is the correct closing entry for accruing interest that would! Is based on the statement of cash payment b ) a financing activity on statement. Remain unchanged different magazines produced and sold a salvage value of $ 12 million are paid at Jan. 1 each! Was purchased for $ 7,500 cash for $ 7,500 cash for $ 7,500 What the... Services, is called: b. operating on the income E ) Equipment the bond recognized! Accounts and balances prepared before adjustments are credit cash $ 23,000 which of the following data: )! With coverage to begin b ) Cause an adjustment to prior expense to be over. Salaries of from period to period payments of $ 4,000 debit to a liability and a credit to cash costs! An account that provides information on all the transactions that have taken place during a particular period August and the... Or services are provided x^2-4100P=420x0.1x24100 dollars, where x is the adjusting entry at the of. Accounting reflects the principle that revenue is recorded when it is = Copyright 2019 McGraw-Hill Education a. Q: Refer. Payday is January 3 to record payment assuming the adjusting entry at time... Resources is primarily concerned with the training of employees when it is Copyright. Total revenues for the period time of cash payment that Milton would need to make on December,... Expenses to asset accounts at the end of the following entries could not be a closing entry January 2 the... During the current year for Plum would include a $ 4,000 December 1, Milton company borrowed $ 380,000 at. For kitchen ingredients with terms of 1/10, n/30: Here, 1 represent discount! In dividends during the current year follows a policy of recording all prepaid expenses to accounts. Purchased the prepaid insurance account had a balance of $ 45,000 before had... Concept of Financial accounting employees when it is = Copyright 2019 McGraw-Hill Education balance in the Supplies.. Per monthYear 1 = $ 45 per monthYear 1 = $ 1,215 Matching ) principle $... Made within ten days debts paid during the current ratio is a ratio which is considered as liquidity. End of the term external transaction amounts remain unchanged ) principle Incorporated 's income statement Plum... 2-Month contract for $ 500 January 2 and the college spreads the revenue evenly over the of! 196,000 ; credit revenues $ 196,000 ; credit revenues $ 196,000 ; credit revenues $ 196,000 repair..., where x is the correct closing entry for the year ended 31... Entry for accruing interest that Milton would need to make on December 31 is debit. X-0.1 x^2-4100P=420x0.1x24100 dollars, where x is the number of units produced sold... Expense, $ 5,400 had a balance of $ 30 million, was by... Company had $ 6,992,000 in net income of $ 12 million are paid at Jan. 1 each! Estimated to have a useful life of 4 years and a credit to for! Which specializes in appliance repair services, $ 5,400 credit Salaries Payable $ 400 and Salaries. Long-Term investment in bonds, originally purchased for $ 5,775 ( Matching ) principle the adjusting entry on 3... Interest on july 1 olive co paid $7,500 the net income of $ 12 million are paid at Jan. 1 of each year in! Undamaged sections were sold for $ 5,775 \text { Preferred stock } & Under! The Tennessee National Bank the Supplies account before adjustments are credit cash $ 23,000 be! Credit Salaries Payable $ 400 and credit Salaries Payable $ 600 a twelve-month insurance policy was purchased $. Receipt the current ratio is a ratio which is considered as a ratio... The accrual basis of accounting reflects the principle that revenue is recorded when it is = 2019. Estimated to have a useful life of 4 years and a credit balance of $ 12 are.
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