Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 3, Problem 16SEB
To determine
Determine the amount of insurance expense that Company would record on the income statement for the year ended December 31, 2012. Identify whether the adjustment is related to accrual or deferral.
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Bieber Company paid $3,408 on June 1, 2015 for a TWO-YEAR insurance policy and recorded the entire amount as PREPAID INSURANCE. The December 31, 2015 adjusting entry is:
A.
Debit Insurance Expense and credit Prepaid Insurance $994.
B.
Debit Insurance Expense and credit Prepaid Insurance $2,414.
C.
Debit Prepaid Insurance and credit Insurance Expense $994.
D.
Debit P Debit Prepaid Insurance and credit Insurance Expense $2,414.
The Gloria Dimen Company present the following information pertaining to accounts that will need adjustment for its November 30, 20121. On October 1, 2012, Gloria Dimen Company paid P10,800 for 6-monts insurance premiums2. The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on November 30, 2012 totaled P12,8003. Gloria Dimen Company received P22, 800 on November 1, 2012 from customer for service to be rendered during the months of November, December, January, and February.4. Gloria Dimen acquired Office Equipment costing P352, 800 on April 1, 2012. The equipment is expected to last 5 years which it will be worthless.5. Assume that November 30, 2012 is a Friday and that Gloria Dimen pays it's employees a total of P87, 500 on Saturday.Required:A. Prepare the adjusting entries.B. Prepare the December 1, 2012 entry to record payment of the salaries.
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?
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1YTCh. 3 - Prob. 2YTCh. 3 - Prob. 3YTCh. 3 - Prob. 4YTCh. 3 - Prob. 5YTCh. 3 - Prob. 6YTCh. 3 - Prob. 7YTCh. 3 - How does accrual basis accounting differ from cash...Ch. 3 - Prob. 2QCh. 3 - Prob. 3Q
Ch. 3 - Prob. 4QCh. 3 - What are accrued expenses?Ch. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Name two common deferred expenses.Ch. 3 - What does it mean to recognize revenue?Ch. 3 - How does matching relate to accruals and...Ch. 3 - What is depreciation?Ch. 3 - Why is depreciation necessary?Ch. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - When prepaid insurance has been used, the...Ch. 3 - Prob. 10MCQCh. 3 - Prob. 1SEACh. 3 - Prob. 2SEACh. 3 - Account for interest expense. (LO 1, 2). UMC...Ch. 3 - Prob. 4SEACh. 3 - Account for insurance expense. (LO 1, 3). Catrina...Ch. 3 - Prob. 6SEACh. 3 - Account for unearned revenue. (LO 1, 3). Able...Ch. 3 - Prob. 8SEACh. 3 - Prob. 9SEACh. 3 - Prob. 10SEACh. 3 - Calculate profit margin on sales ratio. (LO 5)....Ch. 3 - Prob. 12SEBCh. 3 - Prob. 13SEBCh. 3 - Prob. 14SEBCh. 3 - Prob. 15SEBCh. 3 - Prob. 16SEBCh. 3 - Prob. 17SEBCh. 3 - Prob. 18SEBCh. 3 - Prob. 19SEBCh. 3 - Calculate net income. (LO I, 4). Suppose a company...Ch. 3 - Prob. 21SEBCh. 3 - Prob. 22SEBCh. 3 - Prob. 23EACh. 3 - Prob. 24EACh. 3 - Prob. 25EACh. 3 - Prob. 26EACh. 3 - Prob. 27EACh. 3 - Prob. 28EACh. 3 - Account for insurance expense. (LO 1, 3). Yodel ...Ch. 3 - Prob. 30EACh. 3 - Prob. 31EACh. 3 - Prob. 32EACh. 3 - Prob. 33EACh. 3 - Prob. 34EACh. 3 - Southeast Pest Control, Inc., was started when its...Ch. 3 - Prob. 36EACh. 3 - Prob. 37EACh. 3 - Prob. 38EACh. 3 - Prob. 39EACh. 3 - Prob. 40EBCh. 3 - Prob. 41EBCh. 3 - Prob. 42EBCh. 3 - TJs Tavern paid 10,800 on February 1, 2010, for a...Ch. 3 - Prob. 44EBCh. 3 - Prob. 45EBCh. 3 - Account for insurance expense. (LO 1, 3). All...Ch. 3 - Prob. 47EBCh. 3 - Prob. 48EBCh. 3 - Prob. 49EBCh. 3 - Prob. 50EBCh. 3 - Prob. 51EBCh. 3 - Prob. 52EBCh. 3 - From the following list of accounts (1) identify...Ch. 3 - Prob. 54EBCh. 3 - Prob. 55EBCh. 3 - Prob. 56EBCh. 3 - Prob. 57PACh. 3 - Prob. 58PACh. 3 - Prob. 59PACh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 61PACh. 3 - Record adjustments. (LO 1, 2, 3). The Gladiator...Ch. 3 - Prob. 63PACh. 3 - Transactions for Pops Company for 2011 were as...Ch. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 66PACh. 3 - Prob. 67PACh. 3 - Record adjustments and prepare income statement....Ch. 3 - Prob. 69PBCh. 3 - Prob. 70PBCh. 3 - Following is a partial list of financial statement...Ch. 3 - Prob. 72PBCh. 3 - Record adjustments. (LO 1, 2, 3). Summit Climbing...Ch. 3 - Prob. 74PBCh. 3 - Prob. 75PBCh. 3 - Record adjustments and prepare financial...Ch. 3 - Prob. 77PBCh. 3 - Prob. 78PBCh. 3 - Identify and explain accruals and deferrals. (LO...Ch. 3 - Prob. 2FSACh. 3 - Prob. 3FSACh. 3 - Prob. 1CTPCh. 3 - Prob. 1IECh. 3 - Prob. 3IECh. 3 - Prob. 4IE
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- At the beginning of 2009, A company prepaid insurance in the amount of 120,000 for one year. At the end of December 2009 what are the balances of the prepaid insurance account and the insurance expense account.arrow_forwardArid Company paid $1,704 on June 1, 2013, for a two-year insurance policy and recorded the entire amount as Insurance Expense. December 31, 2013, adjusting entry is Group of answer choices debit Prepaid Insurance and credit Insurance Expense, $497. debit Insurance Expense and credit Prepaid Insurance, $497. debit Prepaid Insurance and credit Insurance Expense, $1,207. debit Insurance Expense and credit Prepaid Insurance, $1,207.arrow_forwardThe Gloria Dimen Company presented the following information pertaining to accounts that will need adjustments for its November 30, 2021, year-end financial statements: On October 1, 2021, Gloria Dimen Company paid P10,080 for 6 months' insurance premiums The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on November 30,2021 totaled P12,800. Gloria Dimen Company received P22,800 on November 1, 2021 from a customer for services to be rendered during the months of November, December, January, and February. Gloria Dimen acquired Office Equipment costing P352,800 on April 1, 2021. The equipment is expected to last 5 years after which it will be worthless. Assume that November 30, 2021 is a Friday and that Gloria Dimen pays its employees a total of P87,500 on Saturday.arrow_forward
- 1.On December 31, 2020, Coolwear, Inc. had a balance in its prepaid insurance account of $55,400. In 2021, $93,000 was paid for insurance. At the end of 2021, after adjusting entries were recorded, the balance in the prepaid insurance account was $45,500. Insurance expense for 2021 was: Group of answer choices A'$102,900 B.$148,400 C.$9,900 D.$93,000arrow_forwardJuices of Pineapple Company paid $3,600 on June 1, 2020 for a two-year insurance policy and recorded the entire amount as Insurance Expense. The December 31, 2020 adjusting entry is: a. debit Insurance Expense and credit Prepaid Expense, $1,050 b. debit Insurance Expense and credit Prepaid Expense, $2,550 c. debit Prepaid Expense and credit Insurance Expense, $1,050 d. debit Prepaid Expense and credit Insurance Expense, $2,550arrow_forwardAt the beginning of the year, it had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in prepaid insurance account was $42,000. Indurancr expense for the year would be: A. $92,400 B. $6,400 C. $134,400 D. $86,000arrow_forward
- The Piper Ventura Illustrators presented the following information pertaining to accounts that willneed adjustments for its Nov. 30, 2021 year-end financial statements. a) On Oct. 1, 2021, Piper paid P10,800 for 6-months’ insurance premiums.b) The balance in the ledger account Office Supplies amounted to P32,000. A count of theoffice supplies on Nov. 30, 2021 totaled P12,800.c) The company received P22,800 on Nov. 1, 2021 from a customer for services to berendered during the months of November, December, January, and February.d) Piper Ventura acquired Office Equipment costing P352,800 on April 1, 2020. Theequipment is expected to last 5 years after which it will be worthless.e) Assume that Nov. 30, 2021 is a Friday and the Piper pays its employees a total of P87,500on Saturday.f) On September 1, the entity completed the negotiations with a client and accepted anadvance of P168,000 for services to be performed on November. The P168,000 wascredited to Unearned Service Revenues on the…arrow_forwardThe Piper Ventura Illustrators presented the following information pertaining to accounts that will need adjustments for its Nov. 30, 2021 year-end financial statements. a) On Oct. 1, 2021, Piper paid P10,800 for 6-months’ insurance premiums. b) The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on Nov. 30, 2021 totaled P12,800. c) The company received P22,800 on Nov. 1, 2021 from a customer for services to be rendered during the months of November, December, January, and February. d) Piper Ventura acquired Office Equipment costing P352,800 on April 1, 2020. The equipment is expected to last 5 years after which it will be worthless. e) Assume that Nov. 30, 2021 is a Friday and the Piper pays its employees a total of P87,500 on Saturday. f) On September 1, the entity completed the negotiations with a client and accepted an advance of P168,000 for services to be performed on November. The P168,000 was credited to Unearned Service…arrow_forwardThe income statement for the year 2018 of Stellar Co. contains the following information: Revenues$70700Expenses: Salaries and Wages Expense$44800 Rent Expense12400 Advertising Expense9900 Supplies Expense5600 Utilities Expense2400 Insurance Expense2100 Total expenses77200Net income (loss)$ (6500) After the revenue and expense accounts have been closed, the balance in Income Summary will be a)a credit balance of $70700. b)a credit balance of $6500. c)a debit balance of $6500. d)$0.arrow_forward
- At the end of the current year, the prepaid insurance account showed a debit the balance of ₱5,000; the balance at the beginning of the year was ₱6,000, and during the year the insurance premiums paid amounted to ₱8,000. Assuming insurance premium payments are initially entered in the prepaid insurance account, the adjusting entry at the end of the year would include:a. debit prepaid insurance ₱9,000b. credit prepaid insurance ₱1,000c. debit insurance expense ₱7,000d. debit insurance expense ₱9,000arrow_forwardDuring the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2021, you come across several items needing further consideration. Currently, net income is $100,000.1. An insurance policy covering 12 months was purchased on October 1, 2021, for $24,000. The entire amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2021.2. During 2021, the company received a $4,000 cash advance from a customer for services to be performed in 2022. The $4,000 was incorrectly credited to Service Revenue. 3. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $2,750 were on hand at December 31, 2021.4. Trojan borrowed $70,000 from a local bank on September 1, 2021. Principal and interest at 9% will be paid on August 31, 2022. No accrual was made for interest in 2021.Required: Using the information in 1 through 4 above, determine the proper amount of net…arrow_forwardThe Piper Ventura Illustrators presented the following information pertaining to accounts that will need adjustments for its Nov. 30, 2021 year-end financial statements. a) On Oct. 1, 2021, Piper paid P10,800 for 6-months’ insurance premiums. b) The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on Nov. 30, 2021 totaled P12,800. c) The company received P22,800 on 1, 2021 from a customer for services to be rendered during the months of November, December, January, and February. d) Piper Ventura acquired Office Equipment costing P352,800 on April 1, The equipment is expected to last 5 years after which it will be worthless. e) Assume that Nov. 30, 2021 is a Friday and the Piper pays its employees a total of P87,500 on Saturday. f) On September 1, the entity completed the negotiations with a client and accepted an advance of P168,000 for services to be performed on The P168,000…arrow_forward
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