The adjusting entry would be Debit rent expenses and credit prepaid rent by $1,037.
Adjusting journal entries are being used to report transactions that occurred but were not correctly documented using the accrual method of accounting.
There at end of an accounting period, the adjusting journal entries are filed in a company's general ledger to comply with the matching and revenue recognition standards.
The most common types of journal entry changes are accruals, deferrals, and estimates. It is used for accrual accounting reasons when one accounting period finishes and another begins..
That instance, rent expenditure for December must be acknowledged; the entry would be as follows.
DR Rent Expense =12444/12
= $1,037
CR prepaid rent $1,037
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Answer:
Gross Margin (dollars) = $62,060
Gross Margin % = 44.33 %
Explanation:
Calculation of Gross Margin
Net Sales $140,000
Less Cost of Sales
Opening Stock $0
Add Purchase of Merchandise $84,000
Less Trade Discount ($84,000 × 7.5%) ($6,300)
Add shipping charges $240
Cost of Goods Sold ($77,940)
Gross Profit $62,060
Gross Margin %
Gross Margin % = Gross Profit / Net Sales × 100
= $62,060 / $140,000 × 100
= 44.33 %
Answer:
C- The soundness of decisions is often limited because managers are unaware of problems or opportunities that exist in the organization
Explanation:
<em>Administrative decision making</em> is moderately rational decision making which considers a limited amount of criteria, not taking the broader picture into account. Therefore, certain problems and potential complications can arise if a more complex analysis of decision factors is not conducted.
In other words, a few possible outcomes are analysed and managers ettle for the one that seems optimal in that limited range.
Answer:
Year 4: $122,500 gain
Year 3: ($87,500) loss
Explanation:
<u>Year 4</u>
losses before taxes = ($225,000) × (1 - 30%) = ($225,000) × 70% = $157,500 net loss
gain on disposal = $400,000 x (1 - 30%) = $400,000 x 70% = $280,000 net gain
net gain = $280,000 - $157,500 = $122,500
<u>Year 3</u>
losses before taxes = ($125,000) x (1 - 30%) = ($125,000) x 70% = ($87,500) net loss