Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Chapter 4, Problem 3MCQ
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Cheyenne Corp. purchased a 12-month insurance policy on March 1, 2017 for $7680. At March 31, 2017, the adjusting journal entry to record expiration of this asset will include:
a.) a debit to Prepaid Insurance and a credit to Insurance Expense for $768.
b.) a debit to Prepaid Insurance and a credit to Cash for $7680.
c.) a debit to Insurance Expense and a credit to Cash for $640.
d.) a debit to Insurance Expense and a credit to Prepaid Insurance for $640.
1. Entity A received a 12% P200,000, note receivable on October 1, 2011. Entity A uses a calendar year period. The principal and interest on the note are due on October 1, 2012. What is the adjusting entry to take up accrued interest income on Dec. 31, 2011?2. Entity A is renting out its building to tenant for a monthly rent of P30,000. As of December 31,2011, the tenant has not yet paid the rent for the months November and December. What is the adjusting entry to take up accrued rent income on December 31, 2011?3. Entity A issued a 12% P500,000, one-year note payable on July 1, 2011. The principal and Interest are due on July 1, 2011. What is the adjusting entry to take up interest expense on December 31, 2011?4. Entity A has equipment with a historical cost of P 1 ,000,000. The equipment was estimated to have a 10- year useful life when was acquired four years ago . What is the adjusting entry to take up the annual depreciation expense on December 31, 2011?5. Entity A total accounts…
Under M. Sabio Company’s accounting system, all insurance premiums paid are debited to prepaid insurance. For interim financial reports, M Sabio makes monthly estimated charges to insurance expenses with credits to prepaid insurance. Additional information for the year ended December 31, 2019 are as follows: Prepaid Insurance at December 31, 2018 P120,500 Charges to insurance expense during 2019( including a year- End adjustment of P10,500) 437,500 Prepaid Insurance at December 31, 2019 110,000 What was the total amount of insurance premiums paid by M. Sabio during 2019?
P448,000
P427,000
P327,500
P437,500
Chapter 4 Solutions
Financial Accounting
Ch. 4 - What is the purpose of recording adjusting...Ch. 4 - List the four types of adjusting entries, and give...Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain how the financial statements relate to...Ch. 4 - What is the equation for each of the following...Ch. 4 - Explain the effect of adjusting entries on cash.Ch. 4 - How is earnings per share computed and...Ch. 4 - Prob. 8QCh. 4 - What are the purposes for closing the books?Ch. 4 - Differentiate among (a) permanent, (b) temporary,...
Ch. 4 - Explain why the income statement accounts are...Ch. 4 - Prob. 12QCh. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - Prob. 3MCQCh. 4 - On June 1, 2016, Oakcrest Company signed a...Ch. 4 - Prob. 5MCQCh. 4 - An adjusted trial balance a. Shows the ending...Ch. 4 - JJ Company owns a building. Which of the following...Ch. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - If a company is successful in acquiring several...Ch. 4 - Preparing a Trial Balance Hagadorn Company has the...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Matching Definitions with Terms Match each...Ch. 4 - Recording Adjusting Entries (Deferred Accounts) In...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Adjusting Entries (Accrued Accounts) In...Ch. 4 - Prob. 4.7MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.9MECh. 4 - Reporting an Income Statement with Earnings per...Ch. 4 - Prob. 4.11MECh. 4 - Recording Closing Entries Refer to the adjusted...Ch. 4 - Prob. 4.1ECh. 4 - Prob. 4.2ECh. 4 - Recording Adjusting Entries Diane Company...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Recording Adjusting Entries and Reporting Balances...Ch. 4 - Determining Financial Statement Effects of...Ch. 4 - Recording Seven Typical Adjusting Entries...Ch. 4 - Prob. 4.9ECh. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Determining Financial Statement Effects of Seven...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Prob. 4.13ECh. 4 - Determining Financial Statement Effects of...Ch. 4 - Inferring Transactions Deere Company is the...Ch. 4 - Analyzing the Effects of Errors on Financial...Ch. 4 - Prob. 4.17ECh. 4 - Recording the Effects of Adjusting Entries and...Ch. 4 - Reporting a Correct Income Statement with Earnings...Ch. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.21ECh. 4 - Recording Four Adjusting Entries and Completing...Ch. 4 - Prob. 4.1PCh. 4 - Prob. 4.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Prob. 4.6PCh. 4 - Prob. 4.7PCh. 4 - Prob. 4.1APCh. 4 - Prob. 4.2APCh. 4 - Prob. 4.3APCh. 4 - Prob. 4.4APCh. 4 - Determining Financial Statement Effects of...Ch. 4 - Prob. 4.6APCh. 4 - Prob. 4.7APCh. 4 - Prob. 4.1CONCh. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Recording Transactions (Including Adjusting and...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Comparing Companies within an Industry and Over...Ch. 4 - Prob. 4.4CPCh. 4 - Prob. 4.5CPCh. 4 - Prob. 4.6CPCh. 4 - Prob. 4.7CPCh. 4 - Prob. 4.8CPCh. 4 - Prob. 4.9CP
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- On January 2, 2016, Tucson Co. purchased a general liability insurance policy for $3,600 for coverage for the calendar year. The entire $3,600 was charged to Insurance Expense on January 2, 2016. If the firm prepares monthly financial statements, the proper adjusting entry on January 31, 2016, will be: Select one: a. Insurance Expense.. 300 Prepaid Insurance.. 300 b. Prepaid Insurance... Insurance Expense... 300 300 C. Prepaid Insurance... 3,300 Insurance Expense..... 3,300 d. Insurance Expense. 3,300 Prepaid Insurance.. 3,300arrow_forwardThe balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200, which represents twelve months’ Insurance purchased on December 1. The adjusting entry required on Dec. 31, 2018 is a. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200 b. debit Insurance Expense, P600; credit Insurance Payable, P600 c. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600 d. debit Prepaid Insurance, P600; credit Insurance Expense, P600 e. debit, Insurance Expense, P600; credit Prepaid Insurance, P600arrow_forwardThe premium on a two-year insurance policy expiring on June 30, 2015, was paid in total on July 1, 2013. The original payment was debited to the insurance expense account. The appropiate journal entry has been recorded on December 31, 2013. The balance in the prepaid asset account on December 31, 2013, should be Group of answer choices 1.lower than if the original payment had been initially debited to an asset account 2.higher than if the original payment had been initially debited to an asset account 3.the same as it would have been if the original payment had been initially debited to an asset account. 4.the same as the original paymentarrow_forward
- Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2019 for $900. At December 31, 2019, the adjusting journal entry to record expiration of this asset will include a: o Debit to Insurance Expense and a credit to Prepaid Insurance for $900 o Debit to Prepaid Insurance and a credit to Insurance Expense for $100 o Debit to Insurance Expense and a credit to Prepaid Insurance for $75 o None of the abovearrow_forwardABC Inc. purchased a 12-month insurance policy on January 1, 2019 for OMR 2400. At June 30, 2019, The Adjusting Entry should be: Select one: Oa. Debit to Insurance Expense, OMR 1200; Credit to Prepaid Insurance for OMR1200 O b.None of the answers are correct Oc Debit to Insurance Expense. OMR 2400; Credit to Prepaid Insurance for OMR 2400 O d. Debit to Prepaid Insurance, OMR 1400; Credit to Insurance Expense for OMR 1400 Oe. Debit to Prepaid Insurance, OMR 2400: Credit to Cash for OMR 2400 Clear my choicearrow_forwardThe balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200 which represents twelve months insurance purchased on December 1. What is the adjusting entry required on Dec. 31, 2021? debit Prepaid Insurance, P600; credit Insurance Expense, P600. debit Insurance Expense, P600; credit Prepaid Insurance, P600. debit Insurance Expense, P600; credit Insurance Payable, P600. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200.arrow_forward
- Under Edelbert company’s accounting system, all insurance premiums paid are debited to prepaid insurance. Information for the year ended December 31, 2018 is as follows:Prepaid Insurance on January 1 200,000Charge to insurance expense 880,000Prepaid insurance on December 31 240,000What was the amount of insurance premium paid in 2018?arrow_forwardRequired: Prepare the adjusting entries with explanation.arrow_forwardc. On September 1, 2019, North Dakota Manufacturing paid a premium of $13,560 in cash for a one-year insurance policy. On December 31, 2019, an examination of the insurance records showed that coverage for a period of four months had expired. Record the adjustment for insurance expired. Note: Enter debits before credits. Date General Journal Debit Credit Dec 31, 2019arrow_forward
- At December 31, 2022, before any year-end adjustments, Blossom Company Prepaid Insurance account had a balance of $6840. It was determined that $3070 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be: O $6840. O $3770. O $3070. O $3300.arrow_forward1. An insurance policy, good for one year, was purchased on April 1, 2020 and has a valueof $25,000.a) Write the journal entry to record the original purchase of the insurance policy onApril 1.b) Write the adjusting journal entry required on April 31, 2020 to reflect the use of onemonth of the insurance service. What, concerning Insurance, would appear on theBalance Sheet? What would appear on the Income Statement?c) Write the adjusting journal entry required on May 31, 2020 to reflect the use of onemore month of the insurance service. What, concerning Insurance, would appear onthe Balance Sheet? What would appear on the Income Statement?arrow_forwardUnder Fierce Company’s accounting system, all insurance premiums paid are charged to insurance expense. Information for the year ended December 31, 2020 is as follows: Prepaid insurance, beg. P150,000 Renewal of insurance charged to expense during the year applicable for the period April 1, 2020-2021 is P500,000. What is the insurance expense using the accrual basis accounting?arrow_forward
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