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son4ous [18]
3 years ago
13

Bailey Co. changed their accounting for insurance expense from the cash-basis to the accrual-basis in the current year. In Janua

ry of the prior year, Bailey recorded insurance expense of $240,000 for the cash purchase of a four-year insurance policy. How should Bailey report the insurance transaction in the current year's financial statements?
Business
2 answers:
Rina8888 [55]3 years ago
3 0

Answer:

$60,000

Explanation:

Since Bailey Co. changed their accounting for insurance expense from the cash-basis to the accrual-basis in the current year, and in January of the prior year, Bailey recorded insurance expense of $240,000 for the cash purchase of a four-year insurance policy.

Bailey should report the insurance transaction in the current year's financial statements of an amortization of the insurance expense over the four year period, and take account the portion that pertains to the current year.

Therefore = $240,000 / 4 years = $60,000 per year

n200080 [17]3 years ago
3 0

Answer:

Bailey must adjust three accounts:

  1. insurance expense
  2. prepaid insurance
  3. retained earnings

First we will start to adjust retained earnings: since retained earnings were underestimated in the past year because $180,000 more of insurance expense was recorded, then we must increase it by $180,000.

Since the insurance will cover this year plus two more years, we must record two years worth of prepaid insurance = $60,000 x 2 = $120,000

Finally we must record the insurance expense for this year = $60,000

The adjusting entry will be:

Dr Insurance expense 60,000

Dr Prepaid insurance 120,000

    Cr Retained earnings 180,000

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5 0
3 years ago
Determine the value of z.
TiliK225 [7]

Explanation:

Let angle y be the unknown angle inside the triangle.

given

y + 87 + 34 = 180 (sum of angles in a triangle)

y + 87 + 34 = 180 \\ y + 121 = 180 \\ y = 180 - 121 \\  = 59

given y + z = 180 (angles on same straight line)

y + z = 180 \\ 59 + z = 180 \\ z = 180 - 59 \\  = 121

3 0
3 years ago
Read 2 more answers
Fiwrt Corporation manufactures and sells stainless steel coffee mugs. Expected mug sales Fiwrt (in units) for the next three mon
olga55 [171]

Answer:

The number of mugs Fiwrt should plan on producing during the month of November is 35400 units of mugs.

Explanation:

Production unit (november) = Sale unit + Desired ending inventory-Beginning inventory

                                               = 36000 + (34000*30%) - (36000*30%)

                                              = 35400 Units

Therefore, The number of mugs Fiwrt should plan on producing during the month of November is 35400 units of mugs.

8 0
3 years ago
ABC Co. uses a perpetual inventory system and uses the FIFO cost flow assumption. During the month, it had two sales. Calculate
Free_Kalibri [48]

The cost of goods sold in dollars for the first sale made on Jan. 10, using FIFO, is <u>$141</u>.

<h3>What is the FIFO method?</h3>

FIFO means First-in, First-out.  

The FIFO inventory method assumes that the Jan. 10 sales of 11 units were made from goods in stock on January 1 and the purchase on Jan. 5.

Using FIFO under the perpetual inventory system, the cost of goods sold on Jan. 10 is calculated as follows:

<h3>Question Completion Data and Calculations:</h3>

Jan 1 Beginning Inventory 8 at $12= $96

Jan 5 Purchase 12 at $15= $180

Jan 25 Purchase 10 at $18= $180

Jan 10 Sale 11 units x $50 each

Jan 30 Sale 3 units x $55 each

Cost of goods sold on Jan. 10 using FIFO = 141 (8 x $12 + 3 x $15)

Thus, the cost of goods sold in dollars for the first sale made on Jan. 10, using FIFO, is <u>$141</u>.

Learn more about the FIFO method at brainly.com/question/11493725

#SPJ1

8 0
2 years ago
Creative Sound Systems sold investments, land, and its own common stock for $37.0 million, $14.3 million, and $38.6 million, res
worty [1.4K]

Answer:

$18.3 million

Explanation:

Financing activities: It includes those activities which comes under the long term liabilities and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption, dividend, and the purchase of treasury stock is an outflow of cash.

The computation of the amount reported as a net cash flows from financing activities is shown below:

Cash flow from Financing activities  

Issuance of common stock $38.6 million

Less: Purchase of treasury stock -$20.3 million

Net Cash flow from Financing activities           $18.3 million

8 0
3 years ago
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