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Illusion [34]
3 years ago
9

Mountaineer Excavation operates in a low-lying area that is subject to heavy rains and flooding. Because of this, Mountaineer pu

rchases one year of flood insurance in advance on March 1, paying $24,600 ($2,050/month).
1. Record the purchase of insurance in advance on March 1.

2. Record the adjusting entry on December31.
Business
1 answer:
vitfil [10]3 years ago
4 0

Answer:

The Journal entries are as follows:

(i) On March 1,

Prepaid insurance A/c Dr. $24,600

        To cash A/c                              $24,600

(To record the purchase of insurance in advance)

(ii) On December 31,

Insurance expense A/c Dr. $20,500

             To Prepaid insurance           $20,500

(To record the insurance expense)

Workings:

Insurance expense:

= $2,050 × 10 months (From March 1 to December 31)

= $20,500

You might be interested in
According to the demand-pull theory, inflation is caused by:
Aliun [14]

Answer:

Understanding Demand-Pull Inflation

Demand-pull inflation is a tenet of Keynesian economics that describes the effects of an imbalance in aggregate supply and demand. When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up. This is the most common cause of inflation.

Explanation:

hope it helps you

6 0
3 years ago
Claremore Company received $7,000 as payment from Tulsa Company for a sale made on account in the previous month. Which of the f
Inessa [10]

Answer:

a. Cash 7,000 Accounts Receivable 7,000

Explanation:

As for the information provided, the payment is received for a sales made in last month, and thus entry at the time of sales shall be:

Accounts Receivables A/c Dr.  $7,000

                    To Sales                               $7,000

Therefore, when the amount is collected today it will increase cash by debiting cash for the same amount.

Further, balance of accounts receivables will be decreased by crediting such account.

Therefore, correct option is

a. Cash 7,000 Accounts Receivable 7,000

7 0
3 years ago
You are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost
Finger [1]

Answer:

False

Explanation:

Since for finding out whether the offer is accepted or not, first we have to determine the total cost at 600 number of players and for 601 number of players which is

The total cost of 600 players is

= 600 × $300

= $180,000

The total cost of 601 players is

= 601 × $301

= $180,901

Now the marginal cost is 601 player is $901 which is difference between the $180,000 and $180,901 that is higher than the offered price i.e $550

Therefore, the offer should not be accepted

6 0
3 years ago
Jermaine owns a rental home in Lake Tahoe and traveled there from his home in San Francisco for maintenance and repairs three ti
liraira [26]

Answer:

No answer is correct.

If we use the values set by the IRS for 2019, the total travel costs deduction = $290.58.

If we use the 2018 value, the total travel costs deduction = $273.05

Explanation:

The new mileage reduction set by the IRS for 2019 is 58 cents (up from 54.5 cents) per mile. Since Jermaine had to travel 3 times during the year and drove for 167 miles, his total deduction should be:

  • total travel costs deduction = 3 x 167 x $0.58 = $290.58

If we use the 2018 deduction rates, Jermaine's total travel deduction will be:

  • total travel costs deduction = 3 x 167 x $0.545 = $273.05

3 0
3 years ago
If a fee of $2,850 earned from a client was debited to Accounts Receivable for $2,580 and credited to Fees Earned for $2,850, wh
Natalka [10]

Answer:

Explanation:

given data

fee = $2850

receive = $2580

credit fees = $2850

to find out

which statement true

solution

we know here that fee earn by client is here  $2850

and        

$2580 receive as debit account  so

$2850 fee earn credit

so we can say here

credit balance will be high ( 2850 - 2580)

higher = 270

so option A is correct          

so here the credit account total of trial balance would be high by $270

4 0
3 years ago
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