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Virty [35]
4 years ago
12

Mama's Pizza Shoppe borrowed $7,200 at 12% interest on May 1, 2021, with principal and interest due on October 31, 2022. The com

pany's fiscal year ends June 30, 2021. What adjusting entry is necessary on June 30, 2021
Business
1 answer:
olganol [36]4 years ago
7 0

Answer:

<h2>Mama's Pizza Shoppe</h2>

Adjusting Entry on June 30, 2021:

Debit Interest Expense $144

Credit Interest Payable $144

To accrue interest expense for the year (2 months).

Explanation:

a) Calculation: The interest on the borrowing is $144 ($7,200 x 12%)/12 x 2

b) Adjusting entries are prepared at the end of the accounting period in order to recognize non-cash expenses and revenue, prepaid expenses, and revenue received in advance, and depreciation expense for the period.  It is in accordance with the accrual concept and matching principle of generally accepted accounting principles.  These require that expenses and revenue are recognized on the accrual basis whether cash is paid or received for them or not.  And that expenses and revenue are matched to the period they occur.

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Profit Inc., a manufacturing firm, has purchased raw materials worth $10,000 on credit from its vendors. The business plans to s
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Profit Inc., a manufacturing firm, has purchased raw materials worth $10,000 on credit from its vendors. The business plans to settle the vendor’s full payment after two months. Under "current liabilities"section of balance sheet this account will be recorded as "account payable".

Answer: Option (B) is correct

<u>Explanation:</u>

Raw material purchased on credit from a vendor is a liability and it is shown under current liabilities in "accounts payable". Since raw material purchased on credit and payment is to be made after two months.

Payment due gives rise to liability. Now current liability is a company's short term obligations that are to be paid back within a year. Here the firm will have to make payment within two months to the vendor.

8 0
3 years ago
Read 2 more answers
During its first year of operations, a company entered into the following transactions: Borrowed $20,000 from the bank by signin
Alenkinab [10]

Answer:

$62,400

Explanation:

Assets are Economic resources controlled by the entity as a result of past events from which cash is expected to flow into the business.

Assets include the following Amounts:

Cash from Bank Note              $20,000

Cash from Stock Issues           $40,000

Supplies Inventory                     $4,000

Payment for Supplies                ($1,600)

Total Available Assets             $62,400

5 0
3 years ago
While working at a busy law firm, Bruce is using Skype to meet with a client in another state. Although Bruce is trying to conce
Neporo4naja [7]

Answer:

Information overload

Explanation:

Information overload can be described as a type of difficulty experienced by individuals in some situations, it is as a result of too much information present at a particular time, this makes it hard for the individual to carry out the right decision.

As individuals we come across a lot of information daily, but our brains can only process such information one at a time, if we attempt to process more data it may lead to the overstressing of the brain capacity which may eventually cause information overload.

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3 years ago
Manufactured goods needed to produce other goods and services are called
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When manufactured goods are used to produce other goods and services, they are called capital goods.<span>True</span>
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3 years ago
Kim-su found an apartment that she wants to rent. the rent is $715 per month and there is a security deposit of $465. to move in
Mice21 [21]
Given the details above which includes the amount for the rent per month and the security deposit, Kim-Su is required to pay the first month's rent, the last month's rent and the security deposited. Based on this, I can say that the total amount Kim-Su needs is $715 + $715 + <span>$465 is $1,895. Hope this answer helps.</span>
8 0
3 years ago
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