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Aleonysh [2.5K]
3 years ago
14

On December 31, 2018, the unadjusted balance in Prepaid Insurance was $2580. This was the amount paid in the middle of the year

for a two-year insurance policy with coverage beginning on July 1, 2018. The unadjusted balance in Insurance Expense was $390, which was the cost of insurance from January 1 to June 30, 2018.
What is the adjusted journal entry for both insurance expense and prepaid insurance?
Business
1 answer:
mixer [17]3 years ago
4 0

Answer:

Debit Insurance expense $665

Credit Prepaid Insurance  $665

Being entries to recognize insurance expense incurred between July and December, 2018

Explanation:

When an amount is prepaid for insurance expense to be incurred at a later date, the entries required are

Debit Prepaid insurance account

Credit Cash account

When the expense is incurred, the entries then required will be

Debit Insurance expense

Credit Prepaid Insurance

Since the $2,580 paid was for a two-year insurance policy with coverage beginning on July 1, 2018, at at December 31, 2018, the expense would have been incurred for 6 months out of the 24 months (2 years) paid for. This expense amounts to

= 6/24 × $2,580

= $665

Hence the adjustment required

Debit Insurance expense $665

Credit Prepaid Insurance  $665

Being entries to recognize insurance expense incurred between July and December, 2018

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c. All are correct.

Explanation:

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A corporation with a clear purpose or undertaking is one that is simple to recognize and manage. A common purpose unifies personnel and facilitates them to understand the corporation’s direction.

Hence, according to me, among all the Schein’s four key elements in the organization’s structure, the Common purpose is the most key element.

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2 years ago
The following materials standards have been established for a particular product: Standard quantity per unit of output 4.6 grams
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Answer:

15,351.00 unfavourable

Explanation:

<em>Material quantity variance occurs when the actual quantity used  to achieved a given level of output is more or less than the standard quantity.</em>

<em>It is determined by the difference between the actual  and standard quantity of material for the actual level of output multiplied by the the standard price</em>

                                                                                              gram

300 units should have used (300× 4.6)                             1380

but did used                                                                        <u>2,400</u>

                                                                                           1020

Standard price                                                                   ×<u> 15.05</u>

Material quantity variance                                         1<u>5,351.00</u> unfavourable

           

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Safety Supply Corporation in New York sells a truckload of protective suits, masks, and other safety gear to Toxic Recovery, Inc
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A is the correct option

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