8

The following information relates to year-end adjusting entries as of December 31, 2021. Depreciation of the mountain bikes purc

Akimi4 [234]

Question Completion:

Record the adjusting entries.

Answer:

Adjusting Journal Entries:

Debit Depreciation Expense - Mountain Bikes $6,660

Credit Accumulated Depreciation - Mountain Bikes $6,660

To record depreciation expense for the period.

Debit Insurance Expense $

Credit Prepaid Insurance $

To record the insurance expense for the period.

Debit Rental Expense $

Credit Prepaid Rental $

To record the rental expense for the period.

Debit Office Supplies Expense $700

Credit Office Supplies $700

To record office supplies expense for the period.

Debit Interest Expense $

Credit Interest Expense Payable $

To record interest expense on the $44,000 loan.

Debit Racing Supplies Expense $1,990

Credit Racing Supplies $1,990

To record racing supplies expense for the period.

Debit Income Tax Expense $13,900

Credit Income Tax Payable $13,900

To record income tax expense payable.

Explanation:

Adjusting journal entries are recorded in order to present elements of financial statements based on the accrual basis and not whether cash was paid or received.

In this question, some data were not provided. This is why some figures were not disclosed for Insurance Expense, Rental Expense, and Interest Expense. But, the accounting treatments remain valid. Only the figures are missing.

5 0

3 years ago

Use the following information to answer the next question. Total Asset = $40 million Depreciation = $1.0 million. Basic earning

Marizza181 [45]

Answer:

a. $8.0 million; $1.22 million

Explanation:

The computation is shown below:

As we know that

Basic earnings power = EBIT ÷ total assets

So,

EBIT = Basic earnings power × total assets

= 0.20 × 40 million

= $8 million

Now

Times interest earned = EBIT ÷ interest expense

So,

Interest expense = EBIT ÷ Times interest earned

= $8 million ÷ 6.55

= $1.22 million

5 0

3 years ago

When previously declared cash dividends on common stock are paid which account would the corporation debit?

garri49 [273]

Answer:

C.

Explanation:

Financial Statements depicts the financial position of a firm at a particular point of time or specified date. The users of financial statements use various types of analysis to understand or compare the current financial statements of the company to prior years or with those of the competitors.

The journal entry on declaration of dividend would lead to a debit to retained earnings and credit to dividends payable.

No journal entry is passed on the date of recording dividend.

Later, on the date of payment of dividend would lead to a debit to dividends payable and credit to cash account.

The journal entries have been shown below:

4 0

4 years ago

Unearned revenues are generally revenues that have been earned and received in cash revenues that have been earned but not yet c

Tcecarenko [31]

Unearned revenues are general revenues that Liabilities created when a customer pays in advance for products or services before the revenue<span> is earned

If a client pay us for our service in advance, we now have an obligation to provide services that we must fulfill in the future.
In accounting, we could consider this obligation as a liability which will be recorded in credit when it increased.
</span>

5 0

3 years ago

Indicate whether the demand of below goods is elastic or inelastic. Think about each good in terms of the typical person's quant

dexar [7]

Answer:

Elastic Demand : a , b , c

Inelastic Demand : d , e , f

Explanation:

Demand Elasticity is responsiveness of quantity demanded to price change. If demand responds more to price change, Demand is Elastic. If demand responds less to price change, Demand is Inelastic.

If goods have non necessary consumption or/ & have more substitutes, its demand can be reduced or shifted to other alternatives easily. So, such demand is Elastic. If goods have necessary consumption or/& have less substitutes, demand can be reduced or shifted to other alternatives easily. So, such demand is Inelastic.

a, b , c : 'Cocoa' Pebbles cereal, 'Tropicana' Orange Juice, Fast food in mall food court - Are single brands or sellers of a good among many competitors, so scope of substitution make their demand elastic.

d , e , f : blood pressure and diabetes medication, public water and other utilities - are necessity goods and cigarettes if smoke 3 packs a day - implies the person is addicted to its consumption. So, their demand is Inelastic.

3 0

3 years ago