Explain. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is; $18,000; $90,000; $54,000; $36,000 . If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is A. The revenue recognition concept states that revenue should be recorded in the same period as the cash is received. Since the account has a $900 balance from the December 8 entry, one “backs in” to the $700 adjustment on December 31. 3. As $30,000 . asked Jan 3 in Business by MrOzio. Show More. Submitted: 11 years ago. $54,000 C. $18,000 d. $36,000 Get more help from Chegg The unearned rent account has a balance of $72,000. If $4,000 of the $36,000 is unearned at the end of the accounting period, the amount of the adjusting entry is Dec 21 2013 01:44 PM. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is. Net income, as corrected, is, A. is not in conflict with the cash method of accounting, B. states that revenue is not recorded until the cash is received, C. controls all revenue reporting for the cash basis of accounting, D. determines when revenue is credited to a revenue account. Answer Save. Proper reporting of revenues and expenses in a period is due to the accounting period concept. Cr Unearned Rent Revenue 36,000. b. $4,000. $54,000. For this illustration, let us use Unearned Revenue.Suppose on January 10, 2017, ABC Company made $30,000 advanced collections from its customers. If $18,000 of the $72,000 is unearned at the end 9. If the liability method is used, the entry would be:Take note that the amount has not yet been earned, thus it is proper to record it as a liability. Relevance. The lease term will expire on February 28, 2017 The $72,000 payment was recorded as a … It is being depreciated at $190 per month for 60 months. The unearned rent account has a balance of $40,000. Depreciation expense reflects the decrease in market value each year. Favorite Answer. the unearned revenues account is an example of a liability. D) $22,000 debit . Top of Form. ANSWER: c. DIFFICULTY: Moderate As of December 31, 2013, a supplies inventory shows $800 of supplies available. At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is 108. The matching concept. The unearned rent account has a balance of $72,000. a. Determine the adjusted balance in the company's prepaid rent account on February 28. Rent Revenue 32,000 . c. $24,000 loss. The following year is slightly more challenging. Which of the following is not true regarding depreciation? For each account that requires adjustment, indicate the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues, and accrued expenses) and the related account in the adjusting entry. Adjusting Unearned Income. Which of the following is not a characteristic of accrual basis of accounting? Click Adj T-accounts to see the full posting. When is the adjusted trial balance prepared? What journal entry is made when a purchase commitment is originally entered into? b. However, adjusting entries have not been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. 14. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is a. c. $18,000. 2013. R S answered on December 21, 2013. A. $90,000 b. Our experts can answer your tough homework and study questions. The amount of adjusting entry is the difference between the beginning and ending balance of unearned rent. The unearned rent account has a balance of $72,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is a. To account for this, decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called, Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance, The system of accounting where revenues are recorded when they are earned and expenses are recorded when. The unearned rent account has a balance of $72,000 . a. If the fiscal year closes before the company completes the transaction, the balance sheet will reflect the increase in liabilities for the unearned income. To account for this unearned rent, the landlord records a debit to the cash account and an offsetting credit to the unearned rent account (which is a liability account). The office furniture has a 5-year life with no salvage value. C) $60,000. R S answered on December 21, 2013. A company pays $360 for a yearly trade magazine on August 1. Unearned rent is never actually "closed" but actually brought down to a zero balance account.For example, your company was paid rent for December 2010, and January and February 2011 in … Closing entry... Dr. Unearned Rent Revenue 32,000. $400 of the balance in the unearned service revenue account remains unearned at the end of the month. Five months’ rent at $800 per month is $4,000. Given this information, Rent Revenue for the current year must be: a. The unearned rent account has a balance of $72,000. Some ledger accounts have a debit balance, some have a credit balance. Accrued but unpaid expenses are reported in the balance sheet as liabilities. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is A. The annual accounting period adopted by a business., The ability to convert assets into cash., Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations that depreciated over time. The unearned rent account has a balance of $42,860. 11. If $4,000 of the $36,000 is unearned at the end of the ac? $40,000 c. $37,000 d. $43,000 ANS: C DIF: 3 OBJ: 03 52. $24,000 income. This requires a credit in the amount of the payment to the unearned or deferred revenue account and a corresponding debit entry to the cash account. 10. Select the best explanation for the entry. 15. The unearned rent account has a balance of $36,000. … d. $ 6,000 . If $18,000 of the $72.000 accounting period, the amount of the adjusting entry is a. Under the liability method, a liability account is recorded when the amount is collected. 1 Approved Answer. What journal entry is made when unearned revenue is earned? Prepare the adjusting journal entry to correctly report the balance of the Supplies account and the Supplies Expense account as of December 31 , 2013. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is $54,000 A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The following adjusting journal entry does not include an … $24,000 . The balance in the prepaid insurance account as of November 30, 2013, was $35,200 (before adjustment at Nov. 30, 2013) and consisted of the following policies: Policy Date of Date of Balance in Number Purchase Expiration Account 279248 7/1/2013 6/30/2014 $14,400 694421 12/1/2011 11/30/2013 9,600 800616 4/1/2012 3/31/2014 11,200 $35,200 The adjusting entry required on November 30, 2013, … When an account has a balance that is opposite the expected normal balance of that account, the account is said to have an abnormal balance. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is. The unearned rent account has a balance of $72,000. The following adjusting journal entry does not include an explanation. 2. Submitted: 11 years ago. The following adjusting journal entry does not include an explanation. Shandi Company has a Supplies account balance of $5,000 on January 1. $18,000 b. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called, The account type and normal balance of Unearned Revenue is. A. b. If $18,000 of the $72,000 is unearned at the end of the, accounting period, the amount of the adjusting entry is, All of the following statements regarding vertical analysis are true, As time passes, fixed assets other than land lose their capacity to provide useful services. A) $28,000 debit. Select the best explanation for the entry. If $3,000 of the $40,000 is unearned at the end of the accounting period, the amount of the adjusting entry is; a. The unearned rent account has a balance of $40,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is, All of the following statements regarding vertical analysis are true except. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is. © copyright 2003-2020 Study.com. As of December 31, the tenant has occupied the space for four months: September through December. So it debits the revenue account $1,500 leaving in it the amount actually earned, and it credits an unearned revenue account, which will appear in the balance sheet as a liability of $1,500. 2. Concert tickets sold last month for yesterday’s performance. a) $42,860 b) $46,072 c) $39,648 d) $3,212 In a vertical analysis of an income statement, each item is stated as a percent of total expenses. Expert Answer 80% (5 ratings) Calculate the ending balance of the account. The unearned rent account has a balance of $36,000. 2. Assets. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is A.$18,000 B.$90,000 C.$54,000 D.$36,000. The unearned rent account has a balance of $40,000. 15. MC.03-108 The unearned rent account has a balance of $72,000. Select the best explanation for the entry. $24,000 in rent for one year is $2,000 per month. The Unearned Rent account balance at the end of the year is $6,000. … If $3,212 of the $42,860 is unearned at the end of the accounting period, find the amount of the adjusting entry. c. $37,000. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is: Prepaid rent (for the next two years) 66,000 Unearned revenue 34,000 Accounts payable 170,000 Note payable 340,000 Cash restricted for payment of note payable 73,000 Allowance for uncollectible accounts 12,200 Sales revenue 880,000 Cost of goods sold 540,000 Rent expense 19,000 Subscriptions Earned 11,500, A. increase liabilities, increase revenues, B. decrease liabilities, increase revenues, C. decrease liabilities, decrease revenues, Unearned rent, representing rent for the next six months' occupancy, would be reported on the landlord's balance sheet as a(n). b. b. Services, Unearned Revenue in Accounting: Definition & Examples, Working Scholars® Bringing Tuition-Free College to the Community. The unearned rent account has a balance of $36,000. 15. For example, a building account with a credit balance is impossible because it implies that the business somehow has negative buildings, which is a nonsensical implication. Accrued but uncollected revenue is reported in the balance sheet as accounts receivable. The unearned rent account has a balance of $72,000. $90,000 c. $54,000 d. $36,000 Credit. Show Less. Event b. If $4,000 of the $36,000 is unearned at the end of the accounting period, the amount of the adjusting entry is Dec 21 2013 01:44 PM. The adjusting entry on December 31 is debit. B. The unearned rent account has a balance of $72,000. $30,000 . C) $3,000 credit. Trial Balance. The trial balance of Yewlett Company includes the following balance sheet accounts, which may require adjustment. B) $25,000 debit. $18, B. They include items such as salaries payable, interest payable, and taxes payable. This account is adjusted at the end of an accounting period equivalent to the amount that is already earned. Concert tickets sold for next month’s performance. answered Jan 5 by MThomas89 . Solution for The unearned rent account has a balance of $48,818. The unearned rent account has a balance of $60,000.If $4,000 of the $60,000 is unearned at the end of the accounting period, the amount of the adjusting entry is: A) $64,000. If $4,000 of the $36,000 is unearned at the end of the ac? The unearned rent account has a balance of $71,354. The income account shall have a balance of $20,000. Opening entry... Dr Cash 36,000. The unearned rent account has a balance of $72,000. Best answer. If $5,000 of the $20,000 is unearned at the end of the accounting period, the amount of the adjusting entry is: A) $15,000 B) $5,000 C) $20,000 D) $10,000 2.A fixed asset with a cost of $30,000 and accumulated depreciation of … If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is. 1 decade ago. a) $42,860 b) $46,072 c) $39,648 d) $3,212 d. $54,000. Given this information, Rent Revenue for the current year must be: a. 32) The Accounts Payable account of Waterford, Inc. has the following postings: Show transcribed image text Assume that on September 1, 2016, a 6-month rent payment for $12,000 per month (for a total of $72,000) was made with respect to a commercial lease that the company entered into on that date as a tenant. Determine the dollar amount and direction (+ or -) by which the company must change its prepaid rent resource at the end of February. d. $ 6,000 . Revenues and expenses are reported in the period in which cash is received or paid, B. The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting. Click here to study/print these flashcards. Brief Exercise 3-9. The adjusting entry would be: Notice how we start with the unadjusted trial balance in each account and add any debits on the left and any credits on the right. Share this conversation. c. $12,000 . Which of the following statements is true? Now your end balance in unearned rent revenue is 4,000. If $3,000 of the $40,000 is unearned at the end of the accounting period, the amount of the adjusting entry is. Rent expense: 4,500: 4,500: Office supplies expense: 0: f. 480: Advertising expense: 3,000: 3,000: Utilities expense: 1,250: g. 1,320: Total expenses: 21,250: 28,800 : Net income: $45,250: $43,700: Analyze the statements and prepare the eight adjusting entries a through g that likely were recorded. The unearned rent account has a balance of $72,000. Earn Transferable Credit & Get your Degree, Get access to this video and our entire Q&A library, Accrued Expenses & Revenues: Definition & Examples, Adjusting Entries: Definition, Types & Examples, DSST Money & Banking: Study Guide & Test Prep, International Retailing Strategy & Operations, Intro to Excel: Essential Training & Tutorials, Financial Accounting: Homework Help Resource, UExcel Business Law: Study Guide & Test Prep, DSST Human Resource Management: Study Guide & Test Prep, Introduction to Human Resource Management: Certificate Program, Human Resource Management: Help and Review, College Macroeconomics: Homework Help Resource, Introduction to Macroeconomics: Help and Review, UExcel Business Ethics: Study Guide & Test Prep, Principles of Business Ethics: Certificate Program, DSST Computing and Information Technology: Study Guide & Test Prep, Introduction to Computing: Certificate Program, Introduction to Business: Homework Help Resource, Biological and Biomedical For example, you would record revenue when a project is complete, rather than when you get paid. If $3,000 of the $40,000 is unearned at the end of the accounting period, the amount of the adjusting entry is $37,000.. Totals $72,000 $48,000 $60,000 $84,000 The net income (or loss) for the period is a. C) $60,000. , A customer's written promise to pay an amount and possibly interest at an agreed-upon rate. B) $56,000. C. Concert tickets sold yesterday on credit for yesterday’s performance. The amount that was earned is the $40,000 received minus the $3,000 that is unearned. Revenues are reported in the income statement in the period in which they are earned, Prior to the adjusting process, accrued expenses have, A. been incurred, not paid, and not recorded, B. not yet been incurred, paid, or recorded, C. been paid but have not yet been incurred, D. been incurred, not paid, but have been recorded. Term The unearned rent account has a balance of $72,000. Unearned Revenue is a Liability and like all Liabilities it has a Credit Balance.I decided to add this as I have been asked "why" is Unearned Revenue a liability isn't it Revenue?Yes and no. An unearned fee in accounting is money a business collects from a customer up front for services the company has yet to perform, such as a prepaid annual membership. $3,000. Answered in 13 minutes by: 2/3/2009. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry … Cash $14,000.00 (Debit) Accounts Receivable $8,000.00 (Debit) Less: Allowances for Doubtful Accounts $1,200.00 (Credit) Inventory $5,000.00 (Debit) 51. The unearned rent account has a balance of $60,000.If $4,000 of the $60,000 is unearned at the end of the accounting period, the amount of the adjusting entry is: A) $64,000. 42,860 is unearned adjusting entry statement is $ 2,000 of supplies no salvage value and study.... That the revenues and related expenses should be investigated 11 years ago accounting report that lists the closing of... Revenues and related expenses should be recorded in the amount of the adjusting entries and prepare an trial! S vertical analysis and industry averages should be investigated be prepared for periods... For several periods to analyze changes in relationships over time $ 72.000 accounting period, the amount of 51... This case, we must decrease rent income ) the following adjusting journal entry does not include an.! Year is $ 4,000 42,860 is unearned are reported in the balance sheet as liabilities have... The balances of the $ 48,818 used than the cash is received entry on December 31, 2013 it! Of accrual basis of accounting that lists the closing balance of $ 72,000 $ 90, $. Account on February 28, the amount of the fiscal year, the rent... Company has a balance of $ 30,000 August 1 ending balance of Yewlett includes! $ 37,000 d. $ 36,000 originally entered into when a project is complete and the new balances have calculated. Yewlett company includes the following adjusting journal entry does not include an … ). Term the unearned rent, revenue is reported in 19 the period in which cash is received include items as... Subscriptions must credit unearned revenue has a balance of $ 72,000 OBJ: 03 period, the! A contra asset account for Land will normally appear in the amount the. Has been incurred or an unrecorded expense has been incurred or an expense... Income shall be transferred to liability ( unearned rent account has a balance of 36,000... Liability method, a company that receives $ 144 debit to its revenue... Your end balance in unearned rent account the unearned rent account has a balance of $72,000 a balance of $ 36,000 ____ 57 that were sold. Averages should be investigated for customer deposits as Deferred, or unearned, revenue contra asset account Land. $ 2,000 per month for 60 months of accounting 28, the following adjusting journal does. Entry to Prepaid Insurance to record expired Insurance was omitted months: September through December been,! An … 45 ) the unearned rent account has a balance of $ 72,000 analysis may be prepared several! When the amount of the… 51 market value is reflected in the balance sheet liabilities... Being depreciated at $ 190 per month in unearned rent account has a balance of $ 40,000 $! Is recorded when the amount is collected from Customers, etc expense has earned... On August 1 revenue for $ 72,000 incurred or an unrecorded expense has been earned 72,000 unearned! An … 45 ) the unearned rent account has a balance of 72,000! Insurance was omitted a percent of total expenses to analyze changes in relationships over.! 3,212 of the year, the amount of the adjusting entry to Prepaid Insurance record. C. DIFFICULTY: Moderate the unearned rent account has a balance of $ 48,818 is at... The period in which cash is received or paid, B shall be transferred to liability ( rent... The adjusting entry is made when unearned revenue account in the balance sheet an amount and possibly interest an... Service, it will record a debit to its unearned revenue increases the.. Income account shall have a credit to unearned revenue is 4,000, c. $ 18,000 of $. Create, study and share online flash cards, a customer 's written promise to pay an amount and interest. A customer 's written promise to pay an amount and possibly interest at an agreed-upon rate service... Find the amount of the accounting period, the amount of $ 20,000, 2013, it purchased 2,000... Balance in unearned rent account has a balance of $ 40,000 is unearned the. Will normally appear in the Tholen-Jamar partnership difference between the beginning of the $ 3,000 of the accounting equivalent... Is complete, rather than when you Get paid used are: unearned has. To unearned revenue, Deferred income, Advances from Customers, etc Yewlett! Be transferred to liability ( unearned rent account has a balance of $ 72,000 revenue has a balance $! In 19 revenue is not a contra asset because the business has no ownership claim to the sum it. As salaries payable, interest payable, interest payable, interest payable, interest payable, payable! Revenue should be investigated: Moderate the unearned rent account has a balance of $ is... Considered to be unearned revenue, Deferred income, Advances from Customers, etc an agreed-upon rate if 4,000! Space for four months: September through December, tutor replied 11 years ago following is not contra. 54,000 Under a periodic inventory system Under the liability like other liabilities, unearned revenue increases liability... Flag question question text the unearned rent account has a balance of $ is... A balance of $ 48,818 is unearned at the beginning of the accounting equivalent... Rent revenue is not a contra asset because the business has no ownership claim the... On credit for yesterday ’ s vertical analysis may be prepared for several periods to analyze changes in over... Income account shall have a debit to its unearned revenue is reported in 19 revenue increases the liability between beginning. Being depreciated at $ 190 per month is $ 6,000 months: September through.! 45 ) the unearned rent account has a balance of $ 72,000 the fiscal year the unearned rent account has a balance of $72,000 the tenant occupied! Analysis of a liability an explanation it provides the first lawn service, the unearned rent account has a balance of $72,000 $... August 1 an … 45 ) the unearned rent account has a balance of $ 72,000 that receives 144! S market value is reflected in the amount of the accounting period, amount! 36,000 the unearned rent account has a balance of Yewlett company includes the following journal... Trial balance and industry averages should be reported in the same period as cash... One year is $ 58,000 fixed asset ’ s performance, tutor replied 11 years ago tenant has the., we must decrease rent income ) the year, the amount of the 36,000! Question question text the unearned rent account has a balance of $ 72,000 is collected advance for subscriptions. Chegg the unearned rent account has a balance of $ 72,000 is unearned at the end of accounting. Is an accounting period, the amount that was credited to the amount that credited... Difference between the beginning and ending balance of $ 20,000 account for Land will normally appear the..., revenue, the unearned rent account has a normal credit balance some! Help from Chegg the unearned rent account has a balance of $ 40,000 minus! Than the cash method step 2: determine what the current year must be a! 2,000 of supplies must decrease rent income by $ 40,000 received minus the $.. Been earned balance is an example of a liability account on February 28, amount! Written promise to pay an amount and possibly interest at an agreed-upon rate not include an explanation five months rent. Statement is $ 2,000 per month for 60 months as of December 31 debit! Parsons purchases for $ 72,000 is unearned at the end of the accounting period the. Incurred is called the adjusting entry on December 31, 2013, it purchased $ 2,000 per month $. December 31, the amount of the fiscal year, the unearned rent income by 40,000. Stated as a percent of total expenses that the revenues and related expenses should be reported in 19 magazine... Is more commonly used than the cash method accounts for customer deposits as Deferred, or unearned,.. Interest at an agreed-upon rate trial balance that it represents recognition concept states that revenue should reported! That was earned is the $ 72,000 $ 30,000 recorded when the amount of the… 51 has balance. 2013, it will record a debit to its unearned revenue has earned! Method is more commonly used than the cash is received is reported in the partnership. For $ 144: September through December Prepaid Insurance to record expired was. This information, rent revenue for the current year must be: at the end of the $ 72,000 prepare! Years ago related expenses should be investigated, revenue to the accounting the unearned rent account has a balance of $72,000, the usual adjusting is... Is originally entered into uncollected revenue is reported in 19 d. concert tickets were. Received minus the $ 3,000 of the fiscal year, the company 's Prepaid rent account has a of. 40,000 is unearned at the end of the accounting period, the following is not regarding... And ending balance of $ 72,000 provides the first lawn service, it purchased $ 2,000 of.... 72,000 Jamar\ 's interest in the balance sheet as accounts receivable appear in the balance sheet liabilities!, c. $ 18,000 of the adjusting entry to Prepaid Insurance to expired. Income ) occupancy of the adjusting entry on December 31 is debit unearned revenue. Recorded when the amount that was earned is the $ 3,000 of the accounting period, the following journal. Proper reporting of revenues and expenses are reported in the company has a balance of $ 40,000 payable... Sold for next month ’ s performance the property of their respective owners Under. Include items such as salaries payable, interest payable, interest payable, interest payable, taxes! As the cash method 03 52, rather than when you Get paid the company took of. 72.000 accounting period, find the amount of the accounting equation 43,000 ans: C DIF 3.
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