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Ray Of Light [21]
3 years ago
10

Embree Corp. purchased a four-year insurance policy on May 1, Year 2, for $12,000, effective immediately. The company expensed t

he full cost of the policy in Year 2. The correct journal entry for Year 2 (ending December 31) will include a_____________.

Business
1 answer:
BlackZzzverrR [31]3 years ago
6 0

Answer:

a. Debit to Prepaid Insurance of $10,000

* Option for this question was missing so I have attached a similar question with this answer and answered accordingly.

Explanation:

Insurance purchased for four years was actually prepaid insurance on May 1, Year 2.

The company expensed all amount by positing following entry ( which is a wrong entry)

DR.   Insurance Expense  $12,000

Cr.    Cash                          $12,000

It should be entered as follow:

DR.   Prepaid Insurance   $12,000

Cr.    Cash                          $12,000

At the end of the year 2 8 months has been passed for which $2,000 is accrued and it will be recorded, as all the amount is charged to the expense account we will adjusted the remaining amount of $10,000 to correct this mistake.

Now at the end of year 2 the correct entry which will settle the expense and prepaid insurance as well is as follow.

DR.   Prepaid Insurance   $10,000

Cr.    Insurance Expense  $10,000

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Answer:

The amount of interest revenue that should be recorded for year 1 is $20.

Explanation:

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What is known as the act of giving "mental connection to a given task" or unit of information
disa [49]

Answer:

The correct answer is letter "B": attention.

Explanation:

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3 years ago
Stuart Corporation produces products that it sells for $17 each. Variable costs per unit are $9, and annual fixed costs are $163
Mila [183]

Answer:

See below

Explanation:

The formula for break even point in unit and dollar is as sewn below;

Break even point in units = Fixed expenses / Contribution margin per unit

Where

Contribution margin per unit = Selling price per unit - Variable expense per unit

Contribution margin per unit = $17 - $9 = $8

But

Fixed expenses = $163,200

Break even point in unit = $163,200 / $8 = 20,400 units

Break even point in dollars = Fixed expense / Profit volume ratio

Where

Profit volume ratio = (Contribution margin per unit / Selling price per unit) × 100

Profit volume ratio = ($8/$17) × 100 = 47.06%

But

Fixed expense = $163,200

Break even point in dollars = $163,200 / 47.06% = $3,468

For desired profit

Sales volume in units = Fixed expense + Desired profit / Contribution margin per unit

= $163,200 + $25,200 / $8

= $188,400/$8

= 23,550 units

Sales volume in dollars = Fixed expenses + Desired profit / Profit volume ratio

= $163,200 + $25,200 / 47.06%

= $4,003

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