Multiple Choice Question 129 Splish Brothers Inc. typically sells subscriptions on an annual basis, and publishes 8 times a year. The magazine sells 72000 subscriptions in January at $8 each. What entry is made in January to record the sale of the subscriptions? Prepaid Subscriptions 576000 Cash 576000 Subscriptions Receivable 72000 Unearned Subscription Revenue 72000 Subscriptions Receivable 576000 Subscription Revenue 576000 Cash 576000 Unearned Subscription Revenue 576000 Show transcribed image text Multiple Choice Question 129 Splish Brothers Inc. typically sells subscriptions on an annual basis, and publishes 8 times a year. The magazine sells 72000 subscriptions in January at $8 each. What entry is made in January to record the sale of the subscriptions? Prepaid Subscriptions 576000 Cash 576000 Subscriptions Receivable 72000 Unearned Subscription Revenue 72000 Subscriptions Receivable 576000 Subscription Revenue 576000 Cash 576000 Unearned Subscription Revenue 576000
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USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6)QUESTIONS:
The following is a December 31, 2016, post-closing trial balancefor Excell Company:
Account Title | Debits | Credits |
Cash | $ 83,000 | |
Accounts Receivable (net of Allowance) | $280,000 | |
Prepaid Expenses | $ 32,000 | |
Investments | $ 65,000 | |
Land | $175,000 | |
Buildings (net) | $160,000 | |
Equipment (net) | $145,000 | |
Accounts payable | $ 73,000 | |
Accrued expenses payable | $ 45,000 | |
Unearned Revenue | $150,000 | |
Notes payable | $300,000 | |
Common Stock | $200,000 | |
Retained Earnings | $172,000 | |
TOTALS | $940,000 | $940,000 |
Additional Information:
1. The cash account includes $22,000 set aside in a legallyrestricted fund to pay bonds payable that mature in 2024, a $15,000cash surrender value of a life insurance policy on the company'sCEO, and $2,000 in petty cash.
2. The accounts receivable balance consists of the following:
a. Amounts owed by customerswith debit balances $ 227,600
b. Customer accounts withcredit balances 10,500
c. Allowance for uncollectibleaccounts - trade customers (9,400)
d. Non-trade note receivabledue in three equal payments on June 25 over the next 3 years64,500
e. Interest receivable on notedue in nine months 7,800
Total $ 280,000
3. The prepaid expenses includes $18,000 that will be consumedduring 2017 and $14,000 that will be consumed during 2018.
4. The investments account is classified as Available for SaleSecurities and includes an investment of $25,000 in bonds thatmature July 1, 2017. Of the remaining investments balance,management intends to hold for at least the next three years. Allinvestments in the portfolio have already been marked-to-market andare reported at Fair Value.
5. The land account includes land which cost $75,000 that thecompany purchased for speculative purposes and is currently heldfor sale. The remaining $100,000 is the cost of land on which thecompany's office building resides. The equipment account includesidle machinery with a book value of $45,000.
6. The unearned revenue represents customer prepayments formagazine subscriptions. Subscriptions are for five years and willbe earned evenly over each of the years beginning January 1,2017.
7. The notes payable account consists of the following:
a. a$50,000 note due in six months.
b. a$100,000 bond due in eight years.
c. a$150,000 note due in six annual installments of $25,000 each, withthe next installment due Nov. 1, 2017.
*Intereston all notes has been properly accrued and is included in accruedexpenses.
Required: After all corrections have beenmade, determine the correct amount of CurrentAssets:
I have already answered questions 1 and 2, I don't need help with those. I posted those for the information in case you need it for the other questions.
[The following information applies to the questions displayed below.]
Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10. At the start of January 2015, VGCâs income statement accounts had zero balances and its balance sheet account balances were as follows: |
Cash | $ | 2,360,000 | |
Accounts Receivable | 152,000 | ||
Supplies | 19,100 | ||
Equipment | 948,000 | ||
Land | 1,920,000 | ||
Building | 506,000 | ||
Accounts Payable | 109,000 | ||
Unearned Revenue | 152,000 | ||
Notes Payable (due 2018) | 80,000 | ||
Common Stock | 2,200,000 | ||
Retained Earnings | 3,364,100 | ||
In addition to the above accounts, VGCâs chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense.
6. Prepare a Statement of Retained Earnings for the month ended January 31, 2015, using the beginning balance given above and the net income from part 5. Assume VGC has no dividends.
|
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Question 23
If a resource has been consumed but a bill hasnot been received at the end of the accountingperiod, then
an expense should be recorded when the bill is received. | ||
an expense should be recorded when the cash is paid out. | ||
an adjusting entry should be made recognizing the expense. | ||
it is optional whether to record the expense before the bill isreceived. |
3 points
Question 24
Prepaid expenses are
paid and recorded in an asset account before they are used orconsumed. | ||
paid and recorded in an asset account after they are used orconsumed. | ||
incurred but not yet paid or recorded. | ||
incurred and already paid or recorded. |
3 points
Question 25
If a business has received cash in advance of services performedand credits a liability account, the adjusting entry needed afterthe services are performed will be
debit Unearned Service Revenue and credit Cash. | ||
debit Unearned Service Revenue and credit Service Revenue. | ||
debit Unearned Service Revenue and credit Prepaid Expense. | ||
debit Unearned Service Revenue and credit AccountsReceivable. |
3 points
Question 26
The preparation of adjusting entries is
straight forward because the accounts that need adjustment willbe out of balance. | ||
often an involved process requiring the skills of aprofessional. | ||
only required for accounts that do not have a normalbalance. | ||
optional when financial statements are prepared. |
3 points
Question 27
On January 1 of the current year, Doolittle Company purchasedfurniture for $7,560. The company expects to use the furniture for3 years. The asset has no salvage value. The book value of thefurniture at December 31of this year is
$0. | ||
$2,520. | ||
$5,040. | ||
$7,560. |
3 points
Question 28
Husker Du Supplies Inc. purchased a 12-month insurance policy onMarch 1 of the current year for $1,800. At March 31, the adjustingjournal entry to record expiration of this asset will include a
debit to Prepaid Insurance and a credit to Cash for $1,800. | ||
debit to Prepaid Insurance and a credit to Insurance Expense for$200. | ||
debit to Insurance Expense and a credit to Prepaid Insurance for$150. | ||
debit to Insurance Expense and a credit to Cash for $150. |