Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end.a. On August 1, the company rented some land from another company for $2,660 for a three-year time period. Trolley charged an expense account on August 1.
b. On February 1, Trolley received $8,000 for a four-year technical service contract. Trolley is performing the services evenly over the four-year period. The company credited a liability account, Unearned Service Revenue, on February 1.
c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note.
d. The weekly (five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday.
Required:
Prepare the adjusting entries for December 31.
Answers
Answer: See explanation
Explanation:
It should be noted that adjusting entries are normally made at the conclusion of an accounting period so that the income and expenditure will be allocated to the particular period when they took place.
Prepaid rent is calculated as:
= 2660 × (36-5)/36
= 2660 × 31/36
= 2290.56
Unearned revenue:
= 8000 × 11/48
= 1833.33
Accrued interest:
= 3400 × 12% × 8/12
= 3400 × 0.12 × 8/12
= 272
Salary expense:
= 2500 × 4/5
= 2000
The adjusting entry has been attached.
Final answer:
The adjusting entries for year-end include recognizing the appropriate portion of prepaid rent, recognizing earned portion of unearned revenue, recording interest receivable and interest revenue, and adjusting for payroll expense and payable.
Explanation:
The adjustments for Trolley Inc. for year-end can be prepared as follows:
- August 1: Trolley Inc. paid $2,660 for a three-year lease. The total expense is spread evenly over the three years, so we recognize 5/36 of the cost this year. That's $2,660 x 5/36 = $367.78. So, the adjusting entry is: Debit Prepaid Rent $367.78 and Credit Rent Expense $367.78.
- February 1: Trolley received $8,000 for a four-year technical service contract. The contract is being delivered evenly over four years, so 11/48 of the revenue is recognized this year. That's $8,000 x 11/48 = $1833.33. Therefore, the adjusting entry is: Debit Unearned Service Revenue $1833.33 and Credit Service Revenue $1833.33.
- May 1: Trolley loaned $3,400 to another company at 12% interest per annum. The interest for the 8 months is $3,400 x 12% x 8/12 = $272. Hence, the adjusting entry is: Debit Interest Receivable $272 and Credit Interest Revenue $272.
- December 31: Trolley pays $2,500 weekly (five-day) payroll. Since December 31 falls on a Thursday, there's one day of expenses to adjust. Thus, the adjusting entry is: Debit Wage Expense $500 and Credit Wage Payable $500.
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Answers
Answer:
Amount invested (P) = $18,065 (Approx)
Explanation:
Given:
Total amount need (A) = $25,500
Number of year (n) = 4
Rate of interest (r) = 9% = 0.09
Find:
Amount invested (P)
Computation:
A = P(1+r)ⁿ
25,500 = P(1+0.09)⁴
25,500 = P(1.41158161)
P = 18,064.8429
Amount invested (P) = $18,065 (Approx)
Answers
Answer:
According to the international Fisher Effect (IFE) the high interest rate reflects a high expected rate of inflation in Turkey.
5.93% - 70% = -64.07%
This means that the Turkish Lira is expected to depreciate by 64.07% against the US dollar
Answers
Answer:
Explanation:
1. The journal entry for declaration of dividend is shown below:
Retained Earnings A/c Dr
= (8,600 million shares × $0.18 per share) = $1,548 million
To Dividend payable in cash $1,548 million
(Being dividend is declared)
2. No journal entry should be passed on the record date
3. The journal entry for payment of the cash dividend is shown below:
Cash dividend payable A/c Dr $1,548 million
To Cash $1,5480 million
(Being payment is made for cash dividend)
Final answer:
The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares involve debiting retained earnings and crediting dividends payable on the declaration date, and debiting dividends payable and crediting cash on the payment date.
Explanation:
The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares would be as follows:
- Declaration Date:
- Retained Earnings DR $1,548,000 (8,600 million shares x $0.18 per share)
- Dividends Payable CR $1,548,000
- Payment Date:
- Dividends Payable DR $1,548,000
- Cash CR $1,548,000
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Answers
Answer:
Current assets - $1,900,000
Explanation:
The computation of the construction account balance is shown below:
= Cost incurred + gross profit - progress billings
where,
Gross profit = Revenue - cost incurred
The revenue = (Cost incurred ÷ total cost) × completion cost
= ($5,400,000 ÷ $9,000,000) × $10,000,000
= $6,000,000
So, the gross profit equal to
= $6,000,000 - $5,400,000
= $600,000
Now put these values to the above formula
So, the value would equal to
= $5,400,000 + $600,000 - $4,100,000
= $6,000,000 - $4,100,000
= $1,900,000 current assets
Inflation premium 5
Risk premium 4
Total return 13 %
Assume that five years later the inflation premium is only 3 percent and is appropriately reflected in the required return (or yield to maturity) of the bonds. The bonds have 15 years remaining until maturity. Use Appendix B and Appendix D.
Answers
Answer:
"1143.817" is the appropriate answer.
Explanation:
According to the question:
Risk premium is:
=
=
K = N
⇒ Bond Price =
K = 15
On putting the values, we get
⇒ Bond Price =
=
Answers
Answer:
given statement is false
Explanation:
given data
average cost of transporting on train = $75
solution
when average cost of transporting as train then a passenger travel from Chicago to St. Louis its cost is $75
so it mean we can say that the overall price by travel by train to be charged from all the customers should be average cost = $75
and railroad allow any passenger to ride for less than $75 is false
so given statement is false