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son4ous [18]
3 years ago
7

For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 3

1. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(a) Collected $2,400 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1.
(b) Paid $1,200 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.
(c) Used a machine purchased on October 1 for $48,000. The company estimates annual depreciation of $4,800.
Business
1 answer:
alexandr1967 [171]3 years ago
4 0

Answer:

(a) Debit Deferred revenue   $800

    Credit Revenue                 $800

    Being entries to recognize revenue earned as at October 31.

(b)  Debit Insurance expense   $400

     Credit Prepaid Insurance    $400

     Being entries to record insurance expense incurred as at October 31.

(c) Debit Depreciation expense  $400

    Credit Accumulated depreciation  $400

    Being entries to record depreciation expense on machine as at October 31

Explanation:

Adjusting entries are required when transactions have occurred but are yet to be properly accounted for in the company's books.

(a) Cash collected in advance results in the debit in cash account and a credit to deferred revenue. When the revenue is earned, it is recognized by crediting revenue and debiting deferred revenue with the amount earned.

As at October 31, amount earned

= 1/3 × $2,400

= $800

Entries required

Debit Deferred revenue   $800

Credit Revenue                 $800

Being entries to recognize revenue earned as at October 31.

(b) For amount paid in advance, the expense is recorded when incurred by debiting the expense account and crediting prepaid account to reduce the amount prepaid.

Expense incurred as at October 31

= 1/3 × $1,200

= $400

Entries required

Debit Insurance expense   $400

Credit Prepaid Insurance    $400

Being entries to record insurance expense incurred as at October 31.

(c) Depreciation expense is recognized as the fixed asset is used by debiting the expense account and crediting the accumulated depreciation account.

Since the annual depreciation is $4,800

Monthly depreciation = 1/12 × $4800

= $400

Entries required

Debit Depreciation expense  $400

Credit Accumulated depreciation  $400

Being entries to record depreciation expense on machine as at October 31

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saveliy_v [14]

Answer:

$21,000

Explanation:

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Amount Received  $1,000 ( Under Medical Coverage)

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3 0
3 years ago
Brick Company produces bricks in two processing departments—Molding and Firing. Information relating to the company’s operations
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Answer:

a. Raw materials used in production: Molding Department, $29,700; and Firing Department, $5,100.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Molding Department (Work in Process) -----------------_-------------- $29,700

Firing Department (Work in Process) ------------_-----_----_-------- $5,100

Raw Materials ----------- $34,800 (Cr)

b. Direct labor costs incurred: Molding Department, $19,000; and Firing Department, $4,200.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Molding Department (Work in Process) -------------------------------- $19,000

Firing Department (Work in Process) ------------------------------------ $4,200

Wages Payable ----------- $23,200 (Cr)

c. Manufacturing overhead was applied: Molding Department, $24,100; and Firing Department, $39,200.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Molding Department (Work in Process) ---------------------------- $24,100

Firing Department (Work in Process) ------------------------------ $39,200

Manufacturing Overhead ----------- $63,300 (Cr)

d. Unfired, molded bricks were transferred from the Molding Department to the Firing Department. According to the company’s process costing system, the cost of the unfired, molded bricks was $66,200.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Molding Department (Work in Process) -------- $66,200 (Db)

Firing Department (Work in Process) --------- $66,200 (Cr)

e. Finished bricks were transferred from the Firing Department to the finished goods warehouse. According to the company’s process costing system, the cost of the finished bricks was $107,600.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Finished Goods (Work in Process) ---------------- $107,600 (Db)

Firing Department (Work in Process) -------------- $107,600 (Cr)

f. Finished bricks were sold to customers. According to the company’s process costing system, the cost of the finished bricks sold was $103,600.

General Journal ----------------------------------------- Debit (Db) -------- Credit (Cr)

Cost of Units Sold -------- $103,600 (Db)

Finished Goods ---------- $103,600 (Cr)

6 0
3 years ago
Data on DVD sales for three different years can best be COMPARED by using a *
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Answer:

Bar graph (chart).

Explanation:

A bar graph also known as a bar chart can be defined as the graphical representation of data (informations) by using vertical columns or rectangular bars. When a data set is observed, a bar chart can be used to graphically represent or record the total or overall amount of information contained therein. Generally, bar charts are used for the comparison of informations obtained from a data collection by representing each value (information) with rectangular bars respectively.

<em>Hence, data on DVD sales for three different years can best be compared by using a bar graph (chart).</em>

The bar graph has a x-axis and a y-axis used to represent the various categories of data collected. Thus, the x-axis could be used to denote the DVD sales while the y-axis is used to denote the year.

8 0
3 years ago
The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $18.50 for each of the 20 million shares s
Cerrena [4.2K]

Answer:

46.79%

Explanation:

Net amount raised = Sale Proceeds - Direct Legal Costs - Indirect Costs

Net amount raised = ($18.50 x $20,000,000) - $580,000 - $190,000

Net amount raised = $370,000,000 - $770,000

Net amount raised = $369,230,000

Share offered at price = $22.80 per share

Amount received per share = $18.50

Underwriting spread = $22.80 - $18.50 = $4.30 per share

Total underwriting spread = Underwriting spread x no. of shares offered

Total underwriting spread = $4.30 x 20,000,000

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Direct cost = Total underwriting spread + Direct Legal Costs

Direct cost = $86,000,000 + $580,000

Direct cost = $86,580,000

Indirect cost = Indirect cost + Total underwriting spread

Indirect cost = $190,000 + ($22.80 - $18.50) x $20,000,000

Indirect cost = $190,000 + $86,000,000

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Total Debt Capital  = $86,580,000 + $86,190,000

Total Debt Capital = $172,770,000

Flotation cost % = Total Debt Capital / Equity Capital raised

Flotation cost % = $172,770,000 / $369,230,000 x 100

Flotation cost % = 46.79%

8 0
3 years ago
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Diseconomies - As the use of a factor increases in production while other factors remain constant, a declining return on that factor implies a declining marginal product.

What is diseconomies?
Diseconomies
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To learn more about diseconomies
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