After all account balances have been transferred from the Adjusted Trial Balance section of the worksheet...

After all account balances have been transferred from the Adjusted Trial Balance section of the worksheet to the financial statement sections, the Income Statement section of the worksheet includes the following totals. The Credit column total is $120,000 and the total of the Debit column is $80,000. The Income Statement section of the worksheet: Multiple Choice

is now complete.

would be completed by entering $40,000 in the Credit column with the words “Net Income” in the Account Name column.

would be completed by entering $40,000 in the Debit column with the words “Net Income” in the Account Name column.

The book value of long-term assets is reported on: Multiple Choice

the balance sheet.

the worksheet.

the income statement.

the statement of owner's equity.

The adjusting entry to account for use of prepaid insurance consists of: Multiple Choice

a debit to Insurance Expense and a credit to Cash.

a debit to Insurance Expense and a credit to Accumulated Depreciation.

a debit to Insurance Expense and a credit to Prepaid Insurance.

a debit to Prepaid Insurance and a credit to Accumulated Depreciation.

Solutions

Expert Solution

1. Debits and credits in an income statement is always equal in a complete income statement. So, if the total of credits in income statement is $120,000 and debits is $80,000

Then the income statement would be complete by entering $40,000 in the debit column with the words "Net Income" in the Account Name column.

hence, the correct answer is

(b) would be completed by entering $40,000 in the Debit column with the words “Net Income” in the Account Name column.

2. The assets, Liabilities and equity are reported in Balance Sheet.

Hence, the long term assets shall be reported in the Balance Sheet.

Hence, the correct answer is (a) Balance sheet.

3. Whenever thr prepaid insurance is paid, the journal is - debit prepaid insurance and credit cash.

Then, at the year end, the adjusting entry for insurance expense is -

Debit to insurance expense and credit to prepaid insurance

hence, the correct answer is (c) a debit to Insurance Expense and a credit to Prepaid Insurance.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The following account balances were taken from the adjusted trial balance for Urgent Messenger Service, a...

The following account balances were taken from the adjusted trial balance for Urgent Messenger Service, a delivery service firm, for the fiscal year ended November 30, 20Y1: Depreciation expense $8,550 Fees earned 684,000 Insurance expense 1,200 Miscellaneous expense 3,600 Rent expense 60,000 Salaries expense 336,300 Supplies expense 3,500 Utilities expense 41,800 Prepare an income statement. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading....

The following account titles and balances were taken from the adjusted trial balance of Prince Co....

The following account titles and balances were taken from the adjusted trial balance of Prince Co. for Year 2. The company uses the periodic inventory system. Sales returns and allowances $11,700 Miscellaneous expense $6,300 Transportation-out $19,300 Sales $21,400 Advertising expense $930 Salaries expense $163,000 Transportation-in $3,350 Purchases $21,250 Interest expense $59,500 Merchandise inventory, January 1 $333,000 Rent expense $9,300 Merchandise inventory, December 31 $6,850 Purchase returns and allowances $11,450 Loss on sale of land $5,300 Utilities expense $12,500 a. Prepare...

The following account balances were taken from the adjusted trial balance for Laser Messenger Service, a...

The following account balances were taken from the adjusted trial balance for Laser Messenger Service, a delivery service firm, for the fiscal year ended April 30, 2016: Depreciation Expense $8,600 Fees Earned 664,000 Insurance Expense 1,700 Miscellaneous Expense 3,750 Rent Expense 59,000 Salaries Expense 338,000 Supplies Expense 4,200 Utilities Expense 42,200 Prepare an income statement. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading....

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled...

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal. Based on this statement, the new accounts executive confidently presented the company’s quarterly financial statements to his accounts manager by stating that the financial statements are correct and complete. However, his account manager disagreed with his statement and would like to check again his work. Explain 5 reasons to support the account manager disagreement...

The year-end adjusted trial balance of the Corporation included the following account balances:

The year-end adjusted trial balance of the Corporation included the following account balances: Retained earnings $325,000 Service revenue 741,000 Salaries expense 396,000 Rent expense 27,000 Interest expense 5,000 Dividends 200,000 Prepare the closing entries. 34. $________ In preparing the closing entries for the temporary accounts, how much should Retained earnings be credited? 35. $________ In preparing the closing entries for the temporary accounts, how much should Retained earnings be debited? 36. $_________ After closing the accounts, what is the...

Income Statement The following account balances were taken from the adjusted trial balance for Capstone Messenger...

Income Statement The following account balances were taken from the adjusted trial balance for Capstone Messenger Service, a delivery service firm, for the fiscal year ended April 30, 20Y7: Depreciation Expense $10,400 Fees Earned 552,200 Insurance Expense 1,980 Miscellaneous Expense 4,160 Rent Expense 79,000 Salaries Expense 277,700 Supplies Expense 3,540 Utilities Expense 30,200 Prepare an income statement. Capstone Messenger Service Income Statement For the Year Ended April 30, 20Y7 Fees earned $ Expenses: $ Total expenses $ Income Statement; Net...

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end...

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31, 2017, follow. Debit Credit a. Interest revenue $ 14,600 b. Depreciation expense—Equipment. $ 34,600 c. Loss on sale of equipment 26,450 d. Accounts payable 44,600 e. Other operating expenses 107,000 f. Accumulated depreciation—Equipment 72,200 g. Gain from settlement of lawsuit 44,600 h. Accumulated depreciation—Buildings 175,700 i. Loss from operating a discontinued segment (pretax) 18,850 j. Gain on insurance recovery of tornado damage...

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end...

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31 follow. Debit Credit a. Interest revenue $ 14,000 b. Depreciation expense—Equipment $ 34,000 c. Loss on sale of equipment 25,850 d. Accounts payable 44,000 e. Other operating expenses 106,400 f. Accumulated depreciation—Equipment 71,600 g. Gain from settlement of lawsuit 44,000 h. Accumulated depreciation—Buildings 174,500 i. Loss from operating a discontinued segment (pretax) 18,250 j. Gain on insurance recovery of tornado damage 20,000...

The following is a list of the accounts and balances taken from the adjusted trial balance...

The following is a list of the accounts and balances taken from the adjusted trial balance at December 31, 2021 for, Meilleur Merchants. The list of accounts is in alphabetical order. All accounts have normal balances. Meilleur uses a periodic inventory system and the earnings approach to recognize revenue. Account Balance Dec. 31 1 Accounts payable $15,000 2 Accounts receivable 30,000 3 Accumulated depreciation—building 15,500 4 Accumulated depreciation—equipment 10,000 5 Advertising expense 4,500 6 Building 84,600 7 S. Meilleur, capital...

The following account balances are taken from Sherwood Ltd.’s adjusted trial balance at June 30, 2020:...

The following account balances are taken from Sherwood Ltd.’s adjusted trial balance at June 30, 2020: Debit Credit Sales revenue $1,254,000 Advertising expense $123,000 Cost of goods sold 594,000 General and administrative expenses 39,000 Selling expenses 75,000 Depreciation expense 70,000 Interest expense 39,000 Interest revenue 43,000 Income tax expense 12,000 Wages expense 166,000 Utilities expense 107,000 Prepare a single-step statement of income for the year ended June 30, 2020. . . . Prepare a multi-step statement of income for the...

Subjects