1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
James, an administrative manager at Seal Inc., is asked to purchase 100 printers for the firm’s office. He contacts a sales repr
Reptile [31]

Answer:

a. Retailer

Explanation:

Retailer is "a business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sell their goods to another business "

Reference: WebFinance. “Read the Full Definition.” BusinessDictionary.com, 2019

8 0
3 years ago
​(Yield to​ maturity) The market price is ​$725 for a 16​-year bond ​($1 comma 000 par​ value) that pays 9 percent annual​ inter
wlad13 [49]

Answer:

13.16%

Explanation:

In this question we use the RATE formula i.e shown in the attached spreadsheet

Given that,  

Present value = $725

Assuming figure - Future value or Face value = $1,000  

PMT = 1,000 × 9% ÷ 2 = $45

NPER = 16 years × 2 = 32 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the yield to maturity is 6.58% × 2 = 13.16%

6 0
3 years ago
Select the correct text in the passage.
AfilCa [17]

Answer:   I heard its the second option, I cannot verify that. But i do have the awnsers to every question for the final in Entrepreneruship, Its on quizlet labeled Entrepreneurship. 37 terms.

Explanation:

5 0
3 years ago
The profit earned from the sale of stock that has increased in value is known as
schepotkina [342]

Answer:

a capital gain . that is c

3 0
3 years ago
Read 2 more answers
Two carpenters at a cabinet company are interested in receiving a raise in salary. Matt has worked for many years at the company
son4ous [18]

Answer:

C.

Explanation:

Jason will get the raise because even though he is new he works hard like he's been there for years. Matt will not get it because even though he has worked there for a while he doesn't do his job good.

Explanation:

5 0
2 years ago
Read 2 more answers
Other questions:
  • You chose to work beyond the age of 67. Your benefit increases 8% for every year you wait past the age of 67 but there is no inc
    14·1 answer
  • Money is always based on a precious metal like gold or silver. anything that is generally accepted in payment for goods and serv
    12·1 answer
  • Moose Industries has a corporate tax rate of 25%. Last year the company realized $14,000,000 in operating income (EBIT). Its ann
    14·1 answer
  • When the interest rate increases, the opportunity cost of holding money Select one: a. decreases, so the quantity of money deman
    15·2 answers
  • The government of Sharonville is deep in debt, and consequently enacts a city ordinance that requires citizens to do volunteer w
    10·1 answer
  • 1. Classify the following cash flows as either operating (O), investing (I), or financing (F) activities. a) _____ Sold long-ter
    9·1 answer
  • During Year 4, Tara wrote off $7,000 in receivables and recovered $4,000 that had been written off in prior years. Tara's Decemb
    6·1 answer
  • What are the key choices a company must make before reaching the final decision to go global?
    9·1 answer
  • a pilot applies for life insurance. the insurer approves the application with a $10 additional monthly premium modification due
    5·1 answer
  • if the firm depiced in figure 5 behaves like a perfectly competitive firm, it will chose the output level of
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!