One reason for developing contingency plans for permit-approved special events is to:

On october 2016, sengal Company recorded a joumal entry debiting prepaid rent and crediting cash for $1,200 in payment for one y

DIA [1.3K]

Answer:

C. Expense $300 of the expense on the income statement.

Explanation:

The correct answer is C.

On 31 December 2016, Sengal Company should report Rent expense of $300 on the income statement.

The initial journal entry was:

Dr Prepaid rent $1, 200

Cr Cash $1, 200

This journal entry recognizes the prepaid rent as an asset to the company because the rent is paid in advance, and they have not yet made use of the property they are renting. The payment is an annual payment, meaning that it is for 12 months. Assuming that the end of the financial year is at 31 December 2016, we know that a portion of the $1, 200 is in excess.

The monthly rent expense is $1,200 / 12 = $100. This means that only $100 is the expense for each month. By 31 December, only $300 was the rent expense. [ $100 x 3]. Sengal Company had paid $900 [$1, 200 - $300] in advance and that $900 was to remain as an asset (prepaid rent). The $300 should be recorded as an expense in the income statement and removed as an asset from the balance sheet.

The subsequent journal entry to record the expense is:

Dr Rent expense $300

Cr Prepaid rent $300

At the end of the financial year [31 December 2016], all income statement accounts must be correctly accounted for. This is because all income and expenses are closed of at year end and are not carried forward into the next financial year. This is according to the GAAP principle of ‘Matching’ which states that all income and expenses should be matched to the correct year in which they occur.

7 0

3 years ago

Larimer Corporation prepares its financial statements in accordance with IFRS. Larimer acquired equipment by issuing 5,000 share

Serggg [28]

Answer:

It should be reported in the notes to the financial statements as a noncash transaction

Explanation:

8 0

4 years ago

What are the roles of financial manager ?

LiRa [457]

Answer:

hope it helps

Explanation:

A Financial Manager, or Finance Manager, builds financial strategies and reports to help companies improve their financial health and meet their long-term goals. Their main duties include preparing an organizations’ activity reports, creating financial forecasts and brainstorming ways to maintain or reduce company costs

4 0

3 years ago

Which type of dss allows you to analyze spatial information?

ZanzabumX [31]

Need and answer choice if you have one

7 0

3 years ago

Consider an investment that pays off $700 or $1,400 per $1,000 invested with equal probability. Suppose you have $1,000 but are

svp [43]

Answer:

a) If you borrow $1,000, the EV is $1,100 and the standard deviation is $990.

b) If you borrow $2,000, the EV is $1,150 and the standard deviation is $1,485.