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BabaBlast [244]
3 years ago
9

The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,290. The year end is March 31. Jo

urnalize the March 31 adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $14,920; (b) the amount of unexpired insurance applicable to future periods is $3,370. Refer to the Chart of Accounts for exact wording of account titles.
Business
1 answer:
makkiz [27]3 years ago
4 0

Answer:

Insurance Expense A/c Dr.              $14,920

     To Prepaid Insurance                                $14,920

Explanation:

In the cases the information is related to insurance expense for the period and insurance expense paid in advance for upcoming period.

Total balance in prepaid insurance before adjustment = $18,290

Expired during the period = $14,920

(a) Entry for the expired amount shall be:

Insurance Expense A/c Dr.              $14,920

     To Prepaid Insurance                                $14,920

As this is the expense amount, it shall no longer be an asset, and shall be charged to expense.

(b) In case 2 the expense for the period = Total prepaid - Unexpired insurance = $18,290 - $3,370 = $14,920

Since the expense amount is same, the entry will be same as in situation (a)

Insurance Expense A/c Dr.              $14,920

     To Prepaid Insurance                                $14,920

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Morganton Company makes one product and it provided the following information to help prepare the master budget for its four mon
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Answer:

Morganton Company

1. Budgeting increases effective financial management while ensuring proper allocation of scarce resources.  It encourages planning for the future as well as improved business decisions.  It helps management to identify problems before they occur and to develop strategies for solving any problems that may arise.  With budgeting, the organization is in a better position to monitor its overall performance and ensure the achievement of its goals and objectives.  Finally, budgeting increases the motivation to achieve goals for both the management and individual employees.

2. The budgeted sales for July are $10,000.

3. The expected cash collections for July are $9,040.

4. The accounts receivable balance at the end of July are $6,000.

5. According to the production budget, the units produced in July are 1,040 units.

Explanation:

a) Data and Calculations:

Budgeted selling price per unit = $70

                                      June      July       August    September  

Budgeted unit sales     8,400   10,000    12,000       13,000

Cash Collections:

40% month of sale      3,360     4,000      4,800        5,200

60% month following                5,040      6,000        7,200

Total cash collections 3,360     9,040    10,800       12,400

Production costs:

                                      June      July    August    September

Ending Inventory        2,000     2,400     2,600

Cost of goods sold     8,400   10,000    12,000       13,000

Goods available        10,400   12,400    14,600

Beginning Inventory   1,680    2,000      2,400         2,600

Production costs        8,720   10,400    12,200

Unit cost of materials $10         $10          $10   ($2 * 5)

Units produced            872      1,040      1,220

Accounts receivable balance at July end:

June credit sales      $8,400

June cash collection  3,360

July 1 Beginning bal.  5,040

July credit sales       10,000

Cash collections       9,040

Ending balance        6,000

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Answer:

≅ 21.8%

Explanation:

The Return on Equity can be calculated by ,

ROE = Net Profit Margin × Return asset × Financial leverage

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Financial leverage = Equity Multiplier = 1.3

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ROE = 12 × 1.4 × 1.3

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Answer:

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Answer:

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