ay corporation disposed of the following tangible personal property assets in the current year. asset date acquired date sold convention original basis furniture (7-year) 5/12/18 7/15/22 hy $ 55,000 machinery (7-year) 3/23/19 3/15/22 mq 72,000 delivery truck* (5-year) 9/17/20 3/13/22 hy 20,000 machinery (7-year) 10/11/21 8/11/22 mq 270,000 computer (5-year) 10/11/22 12/15/22 hy 80,000 *used 100 percent for business. assume that the delivery truck is not a luxury auto. calculate way corporation's 2022 depreciation deduction
Answers
The depreciation deduction of Way Corporation in 2022 is $9,500
How to Solve for Depreciation Deduction?To calculate Way Corporation's 2022 depreciation deduction, we got to decide the balanced premise of each resource and the appropriate deterioration strategy. The furniture and conveyance truck are 5-year property, and the apparatus and computer are 7-year property.
The furniture and conveyance truck were procured some time recently 2018, so they are subject to the half-year tradition (HY), whereas the apparatus and computer were procured after 2017, so they are subject to the mid-quarter tradition (MQ).
The balanced premise of the furniture is $55,000, and the depreciation deduction for 2022 is $5,500.
The balanced premise of the conveyance truck is $20,000, and the deterioration value for 2022 is $4,000.
The balanced premise of the apparatus sold on 3/15/22 is $72,000, and the depreciation conclusion for 2022 is $0.
The balanced premise of the apparatus sold on 8/11/22 is $270,000, and the depreciation deduction for 2022 is $0.
The balanced premise of the computer sold on 12/15/22 is $80,000, and the depreciation conclusion for 2022 is $0.
Hence, Way Corporation's 2022 depreciation deduction is $9,500 ($5,500 + $4,000).
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Related Questions
How do you write a business pitch???
Answers
Answer:
A business pitch is a presentation by one or more people to an investor or group of investors.
Explanation:
have a nice day! hope this helps!
The best business pitch gets to the heart of the matter quickly in order to keep investors from losing interest or worse yet, thinking there's no point to the presentation. Get to the meat of the pitch as soon as possible; if investors don't understand the idea right away, they'll think customers won’t understand it either.
You may want to consider starting with an elevator pitch, so named because it should be short enough to deliver during a brief elevator ride. It can introduce your business pitch and is handy if you stumble across a brief opportunity to sell your idea to a potential investor (for instance, if you find yourself riding to the tenth floor with the likes of Bill Gates). An elevator pitch is a concise and carefully planned description of your company or idea that can be quickly and easily understood. In a longer business pitch, the elevator pitch can be used as the hook: a line or two in your business writing that captures the attention of potential investors.
Once you've started off your business pitch with a brief overview of your business idea, it’s time to flesh out the details. You want to get across the reasons investors should to buy in; for example, what benefits will investors receive if they provide the necessary capital? Your business pitch might include the following:
It is important to do your research. You must know your product, audience, and competitors well and should be prepared to answer any questions potential investors may have. It is important to ensure you are pitching your idea to the right people. Research potential investors and ensure your pitch idea is well-matched to their interests.
While your overall idea is the most important part of your business pitch, make sure to polish the details: be sure your numbers are correct and have evidence to validate any claims you make. Use powerful, convincing words and avoid using superlatives or hyperbole; and, of course, edit your pitch to ensure you have used proper grammar, spelling, and punctuation! You want potential investors to judge your business pitch based on merit rather than surface errors..l
Visit a local residential mortgage lender and obtain information from them regarding the types of mortgage payment plans they offer to customers. Summarize the features of each plan, and discuss the advantages and disadvantages of each plan.
Answers
Local lender offers fixed-rate, adjustable-rate, and interest-only mortgage plans, providing stable monthly payments and varying initial periods.
The first type of mortgage payment plan offered by the local residential mortgage lender is a fixed-rate mortgage. With a fixed-rate mortgage, the interest rate remains constant throughout the loan term, providing borrowers with predictable monthly payments.
This plan offers stability and helps homeowners budget effectively. However, the disadvantage is that if interest rates decrease, borrowers will not benefit from lower rates unless they refinance their mortgage.
The second plan available is an adjustable-rate mortgage (ARM). ARMs have an initial fixed-rate period, typically ranging from 3 to 10 years, after which the interest rate adjusts periodically based on market conditions. During the fixed-rate period, borrowers benefit from lower initial interest rates.
However, once the adjustment period begins, the interest rate can fluctuate, leading to potential increases in monthly payments. ARMs are suitable for borrowers who plan to sell or refinance their homes before the adjustment period begins.
The third option is an interest-only mortgage. This plan allows borrowers to make lower monthly payments during the initial years of the loan term, as they only pay the interest on the loan amount.
However, after the initial period, borrowers must start paying both the principal and interest, resulting in larger monthly payments. Interest-only mortgages are advantageous for those who have a short-term financial strategy, but they can be risky if borrowers are unable to handle the increased payments when the principal is included.
In summary, the local residential mortgage lender offers fixed-rate mortgages for stability, adjustable-rate mortgages for initial lower payments, and interest-only mortgages for reduced initial payments.
Each plan has its advantages and disadvantages, and borrowers should carefully consider their financial goals and circumstances before choosing a mortgage payment plan.
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Which of the following is not a true statement about the impact of immigration on economic growth?
A) Population growth through immigration increases the amount of labor, which is a major component of economic growth.
B) Economists agree that population growth through immigration is a drain on the economy because it lowers per capita GDP.
C) A larger market increases incentives for creativity and attracts more skilled immigrants.
D) Immigrants may create jobs through purchasing goods and services and starting new businesses.
Economists agree that population growth through immigration is a drain on the economy because it lowers per capita GDP.
Typically, modern dev
Answers
The statement that is not true about the impact of immigration on economic growth is: B Economists agree that population growth through immigration is a drain on the economy because it lowers per capita GDP.
In reality, economists do not universally agree that population growth through immigration is a drain on the economy and lowers per capita GDP.
Economic studies on the impact of immigration have shown varying results, and there is no consensus among economists on this matter.
Some studies suggest that immigration can have a positive impact on economic growth by increasing the labor force, boosting innovation and entrepreneurship, and contributing to consumer spending.
It is important to note that the economic effects of immigration can vary depending on various factors such as the skills and qualifications of the immigrants, the specific labor market conditions, and the overall economic context of the receiving country.
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______ planning is used to determine how to accomplish specific tasks with available resources within the next 1 -- 52 weeks.
Answers
Tactical planning is used to determine how to accomplish specific tasks with available resources within the next 1-52 weeks. So answer is Tactical planning
The planning process is an essential tool for managers to ensure the company's success. Planning is a methodical approach to deciding how to accomplish specific tasks with the available resources. Planning determines the best way to reach a specific goal or objective.Planning is done on a continuous basis. It can be divided into several types: strategic, tactical, operational, and contingency. Tactical planning is used to determine how to accomplish specific tasks with available resources within the next 1-52 weeks. Tactical planning typically has a shorter time frame than strategic planning, which covers more extended periods of time.Tactical planning is critical for ensuring that the company's day-to-day operations run smoothly. It focuses on the current situation and short-term goals, which are essential for the success of the company. Tactical plans typically include a detailed action plan, a budget, and a schedule to ensure that everything is completed on time and within budget.In conclusion, tactical planning is an essential tool for managers to achieve their short-term goals. It ensures that the company's day-to-day operations run smoothly and that specific tasks are completed efficiently and effectively.
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What does ceteris paribus mean?
Answers
Answer:
rat
Explanatio
Evaluate the impact of political instability on the country's economy
Answers
Political instability is a condition that can negatively impact a country's economic situation. Some ways political instability affects a country's economy Decrease in Investment and Business, Unemployment, Government Spending.
It is a scenario where the ruling party or political leadership of a country is uncertain or shaky. It has a significant impact on the economy of a country in terms of investment and business, foreign policy, unemployment, and government spending. The following are some ways political instability affects a country's economy:
1. Decrease in Investment and Business: In a situation of political instability, investors are less likely to invest in the country because of the perceived risks associated with the political climate.
It is because they are unsure whether their investment will be protected or whether the rules and regulations that govern business operations will remain stable.
2. Unemployment: Political instability leads to a lack of investment, which, in turn, results in the loss of job opportunities. It is because companies are reluctant to invest in a country where political instability is rampant.
3. Foreign Policy: Political instability can negatively affect a country's foreign policy. It makes it challenging for the government to make and maintain diplomatic relations, as foreign countries may not be willing to engage with a politically unstable government.
4. Government Spending: Political instability often results in the government having to spend more on security measures.
Such measures are necessary to maintain law and order and to deal with protests, strikes, and civil unrest. As a result, the government has less money to invest in infrastructure, social welfare, and other areas of the economy.
In conclusion, political instability has a significant impact on a country's economy. It leads to a decrease in investment and business opportunities, increased unemployment, a challenging foreign policy environment, and reduced government spending.
Countries, therefore, need to work towards political stability to promote economic growth and development.
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**Guys PLEASE HELP** PLEASE <3
Why were Zelkind and Livingston able to start 80 Acres Farm?
A) Using less fertilizer and pesticide gave them the money they needed to buy new plants.
B) The warehouse they wanted to use was already fitted with hundreds of diode lights.
C) Changes in LED lights made them more efficient and less costly than in the past.
D) Wealthy inventors gave them a large sum of money to buy the land they needed.
Answers
Answer:
i think Is D
Explanation:
because the others doesn't make sense
4) Activity 5: Check for ONE Make Your Stand: After graduation you decide to establish your own business. How will you organize it given the life cycle below? 1, Birth 2. Youth 3. Midlife 4. Maturity
Answers
The business lifecycle can be defined as the phases that a business goes through since its conception. It is important that when opening your own business, you understand the phases of the business life cycle to better understand the business and develop strategies to help the business succeed.
1. Birth:
It is the stage where the business is created. In this phase, the company's facilities must be organized, strategic planning, hiring employees, buying stocks and publicizing the inauguration.
2. Youth:
At this stage, the business is becoming known in the market and is starting to generate positive financial results. It is a phase where the focus must be on customer loyalty and on the balance between expenses and income.
3. Middle age:
It is the phase where the business already has a clientele and has already conquered its market share, in this phase the quest is to ensure greater positioning and market leadership.
4. Maturity:
The company has already conquered a loyal clientele and supports itself, in this phase that can last for decades, the business is already consolidated and positioned. The focus therefore must be on maintaining market leadership and differentiation from competitors.
Therefore, the business lifecycle will help the entrepreneur to better manage and control market situations that directly impact the business.
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What are the three basic levels of food service employees?
A
Beginning, intermediate, and advanced
B
Entry, skilled, and supervisory
с
Novice, trainee, and professional
D
Assistant, apprentice, and master
Answers
Answer:
entry,skilled, and supervisory
Explanation:
these job categories are entry level
The three basic levels of food service employees are: B
Entry, skilled, and supervisory.
The Entry-level is the lowest level, requiring no little education or training. Those at this level mainly engage in serving the customers, cleaning dishes, and undertaking some other menial jobs within the food-service chain.
Above the entry-level is the skilled-level. Skilled-level employees include chefs, bakers, and other culinary specialists, who require some years of training and education to be certified as qualified professionals.
The last in the basic level of food service employees are those who supervise both the entry-level and skilled-level personnel. At this level, supervisors require managerial attributes, soft skills, and leadership to maintain the relationships between the lower-level employees and the senior (strategic) managers.
Thus, there are three basic levels of food service employees starting with entry, skilled, and supervisory levels.
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Question 3 of 10
Which of the following is a career you would find in the Finance Career
Cluster?
A. Equine manager
B. Geologist
C. Tax examiner
D. Ecologist
SUBMIT
Answers
Answer:
C. Tax examiner
Your company wants to raise $7.0 million by issuing 20 -year zero-coupon bonds. If the yield to maturity on the bonds will be 9% (annual compounded APR), what total face value amount of bonds must you issue? The total face value amount of bonds that you must issue is $ (Round to the nearest cent.)
Answers
To determine the total face value amount of bonds you must issue to raise $7.0 million, we can use the formula for the present value of a zero-coupon bond.
The formula for the present value of a zero-coupon bond is:
PV = FV / (1 + r)^n
Where:
PV = Present Value (amount you want to raise)
FV = Face Value of the bond
r = Yield to Maturity (annual interest rate)
n = Number of years until maturity
In this case, PV = $7.0 million, r = 9% (0.09), and n = 20 years.
We can rearrange the formula to solve for FV:
FV = PV * (1 + r)^n
Substituting the given values:
FV = $7,000,000 * (1 + 0.09)^20
FV ≈ $7,000,000 * 2.367457
FV ≈ $16,571,199.77
Therefore, to raise $7.0 million, you would need to issue approximately $16,571,199.77 in face value amount of zero-coupon bonds.
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Suppose that we are drilling an oil well. The drilling rig costs $2800 today, and in one year the well is either a success or a failure. The outcomes are equally likely. The discount rate is 10%. The PV of the successful payoff at time one is $3700. The PV of the unsuccessful payoff at time one is $0. Now, we know that the rig can be sold for $2700 in a year. When we include the value of the option to abandon, the NPV of this drilling project should be (keep two decimal places): Your
Answers
When we include the value of the option to abandon, the NPV of this drilling project should be $242.85.
How to find?We are given the following data to calculate the NPV of the project:
Drilling rig cost today = $2800
PV of the successful payoff at time one = $3700
PV of the unsuccessful payoff at time one = $0
Value of the rig if sold in a year = $2700
Discount rate = 10%When we include the value of the option to abandon, the NPV of this drilling project should be $242.85 (rounded off to two decimal places).
To calculate the NPV, we need to calculate the expected value of the project, given that the well is a success or a failure.
PV of the project if the well is a success:
PVS = $3700PV of the project if the well is a failure:
PVF = $0Expected value of the project:
EV = (PVS + PVF) / 2EV
= ($3700 + $0) / 2
= $1850.
NPV of the project = EV - Cost of drilling rig - Value of the option to abandon
NPV = $1850 - $2800 + ($2700 / (1 + 0.1))
NPV = $1850 - $2800 + $2454.55
NPV = -$495.45 + $2454.55
= $1959.10.
So, the NPV of the project is $1959.10.
Option to abandon = Value of drilling rig if sold - Cost of abandonment
Option to abandon = $2700 - $0
Option to abandon = $2700.
When we include the value of the option to abandon, the NPV of this drilling project should be $242.85 (rounded off to two decimal places).
NPV of the project including the value of the option to abandon = NPV + Option to abandon
NPV of the project including the value of the option to abandon = $1959.10 + $2700
NPV of the project including the value of the option to abandon = $4659.10.
Therefore, when we include the value of the option to abandon, the NPV of this drilling project should be $242.85 (rounded off to two decimal places).
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Sometimes a liquid can be sitting there and its molecules will become a gas. That’s called
___________________________________________.
Answers
Answer:
Una vez que toda la sustancia está en estado líquido, al continuar calentando vuelve a subir la temperatura y llega un momento en que las fuerzas intermoleculares ya son incapaces de mantener juntas las moléculas del líquido, por lo que éste hierve y se convierte en un gas, se produce la ebullición.
what concept of scarcity refers to what idea
Answers
Answer:
D
Explanation:
people have limited resources to fufill their unlimited wants.
this one just sounded right to me.
sorry if this is wrong
Question 6 of 10
A human resource staff member was asked to create a job description.
Which of the following steps should be included in the process?
A. Evaluate the employee in the job
B. Interview customers served by the employee in the job
C. Conduct a job analysis
D. Suggest changes to the management structure
Answers
For this human resource staff member who was asked to create a job description, the step that should be included in the process is: B. Interview customers served by the employee in the job.
What is Human resources management?Human resources management (HRM) can be defined as an art that involves effectively and efficiently managing, controlling and improving the functions, number of employees or workers, activities that are being used by an organization.
This ultimately implies that, human resources managers are saddled with the responsibility of recruiting, managing, creating job description, and improving the welfare and working conditions of the employees working in an organization because they are the most important asset of any organization.
In this context, we can reasonably infer and logically deduce that interviewing customers that are served by the employee in the job is a step that should be included in the process of creating a job description.
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Answer: C conduct a job analysis
Explanation:
it is
QUESTION TWO [25]
2.1 Describe the steps in the Research Process. (7)
2.2 Critically discuss Phenomenological and Positivist Research
Paradigms. (14)
2.3 Classify the four (4) types of observation col
Answers
Describe the steps in the Research Process. The steps in the research process are as follows.
What are the steps?Identify the research problem.
The researcher defines and expresses the research question, issue, or challenge. This helps to narrow down and concentrate the research to a more distinct issue.
Literature Review.
It includes a thorough review of existing literature on the subject and includes information from the literature gathered during the research process.
Develop research goals, objectives, and hypotheses.
The research goals provide guidance for the study's overall direction, while the objectives identify specific areas of focus within the scope of the study and hypotheses set the groundwork for the study's methodology.
Collect data.
The data gathering procedure involves collecting information for the research. Data may be collected through primary or secondary sources.
Analyze data.
The collected data is thoroughly analyzed to provide an understanding of the research issue and formulates a conclusion to answer the research question.
Make a conclusion.
In this stage, the researcher summarizes the research results, provides an answer to the study's research question, and offers a review of the findings.
2.2 Critically discuss Phenomenological and Positivist Research Paradigms.Phenomenology and positivism are two distinct research paradigms with a significant variation. The following are the differences:Phenomenology focuses on the meaning of events for humans and how they experience them, while positivism studies objective reality and facts.Phenomenology is concerned with the subjective nature of human experience, whereas positivism aims to observe and interpret reality based on empirical evidence and fact-based analysis.Phenomenology emphasizes understanding and interpretation of human experience, while positivism is more concerned with generalization and prediction.Phenomenology is more concerned with subjective experience and meaning-making, while positivism emphasizes objectivity and quantifiable data.2.3 Classify the four (4) types of observation.
Observational research may be broken down into four categories:
1. Naturalistic observation.
2. Participant observation.
3. Systematic observation.
4. Structured observation.
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imagine braintly not allowing you to talk to a helping hand. yall doing too much that's why they think they the Kardashianios
Answers
Answer:
That's just how they are lol
Answer:
FOREALLL
Explanation:
A market supply schedule shows the relationship between
please!!!!!!
Answers
Answer: A supply schedule is a table that shows the quantity supplied at different prices in the market. A supply curve shows the relationship between quantity supplied and price on a graph.
Explanation: I HOPED THAT HELPED,!
In the City of Lakewood, commercial structures cannot exceed 100 feet in height. A developer wants to build a structure that is 110 feet high. How might he obtain approval
Answers
Answer:
Apply for a variance
Explanation:
From the question, we are informed about the City of Lakewood, commercial structures , which cannot exceed 100 feet in height. A developer wants to build a structure that is 110 feet high. In this case he can obtain approval by Applying for a variance. A variance can be regarded as permit that relax some standard on a land use ordinance. When seeking for an variance, a request would be filed through a written application then a sum of payment is made as a fee. The request will Firstly be directed to the
zoning board, then a notification will be passed to adjacent property owners. Then a hearing by zoning examiner will be held to know if to grant the variance.
Explain what it means to own an individual stock.
Answers
Answer: when one invests in an individual stock, he/she is purchasing ownership. If an individual invested in 100 shares of a public company, that individual would have a percentage of ownership in that company.
Explanation:
1) Nelson Company began operations on December 1, Year 1. The following transactions and adjustments were recorded in December and posted to the company’s ledger accounts:
5) Purchased $500 of supplies on account to be used in January
1.1) Acquired $3,800 cash from the issue of common stock to its stockholders
2.2) Provided services on account for $3,300
3.3) Paid $1,900 cash for land
4.4) Owed $1,400 of salaries expenses to employees for work done in December that will be paid during January
5.6) Collected $1,700 from customers
What is the total of the debit account balances that will be reported on the company's adjusted trial balance at December 31, Year 1?
A) $6,900
B) $9,000
C) $5,200
D) $3,500
Answers
The total of the debit account balances that will be reported on the company's adjusted trial balance at December 31, Year 1 is B) $9,000
Nelson Company Adjusted trial balance at December 31, Year 1
Debit side
Cash $3,600
($3,800+$1,700-$1,900)
Account Receiveble $1,600
($3,300-$1,700)
Supplies $500
Land $1,900
Salaries expenses $1,400
Total debit balance $9,000
Credit side
Account payable $500
Salaries payable $1,400
Common stock $3,800
Service revenue $3,300
Total Credit balance $9,000
Inconclusion The total of the debit account balances that will be reported on the company's adjusted trial balance at December 31, Year 1 is B) $9,000
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what are the common barriers to entry that entrepreneurs might experience in business operations?
Answers
Answer:
Common barriers to entry include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs. Other barriers include the need for new companies to obtain licenses or regulatory clearance before operation.
Explanation:
In a sole sponsorship for network advertising, the:
A. costs are minimal so the sponsor can provide funds for programs, specials, and all kinds of shows.
b. advertiser does not have the authority to control the placement and content of its commercials.
c. advertiser is provided with several bills because all networks are decentralized.
d. advertiser is responsible for both the program content and the total cost of production.
e. advertiser cannot make decisions on the length of the commercial.
Answers
Answer:
D.
Explanation:
Sole Sponsorship is a type of sponsorship in which a company or a person decides to be the only supporter of the event. In Network advertising, when a person decides to sponsor solely, the advertiser becomes responsible for both the program content and the total cost of the production.
The Sole sponsor fund the costs that could be earned from the advertising. The sponsor funds to the content to promote its name and brand.
Some example of sponsors are PepsiCo, Coca-Cola, etc.
Thus from the given options the correct one is D.
How did the goal described in this excerpt most affect the u. S. Economy?.
Answers
The described goal that most affect the economy according to the excerpt is when Federal Reserve raised interest rates to control inflation.
What was described in the excerpt?The excerpt quoted George Bush speech about the Iraqis and how their relationship with Saddem Hussein will most affect them and their economy.
However, the goal that most affect the economy according to the excerpt is if Federal Reserve raised interest rates to control inflation.
Therefore, the Option A is correct.
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What is an investigation?
an attempt to prioritize and analyze risks
an attempt to improve the quality of something
an attempt to collect and analyze information about an incident
an attempt to reduce the costs of risks
Answers
Answer:
An attempt to collect and analyze information about an incident
Answer:
C. an attempt to collect and analyze information about an incident
Explanation: Hope it helps ^w^
Why is transportation infrastructure mostly provided by the state and federal governments rather than the private sector in the United States?
A
It is vital to the nation's economic growth and must be controlled by the public sector.
B
It is not in demand and therefore offers no financial incentives for private firms to produce it.
C
It is too expensive for private firms to produce and therefore must be funded by the government.
D
It is needed by all people and may not be affordable if produced by the private sector.
Quickly...............................................................
Answers
Answer:
The correct answer is the option D: It is needed by all people and may not be affordable ir produced by the private sector.
Explanation:
To begin with, when it comes to terms of public goods it is necessary to understand that the private sector can not given them due to the fact that it will not be profitable for them or in the other case if it were then the majority of the population will not be able to achieve them, so therefore that when it comes to transport infrastructure the government pays for them because there is not private company that will be pleased to provide that service and moreover, it is something needed by all people so that means that can not be excludable because of the high need of use in order to increase the economy of the nation.
A budget is prepared as part of a(n) _____ plan.
Answers
Answer:
Financial
Explanation:
Answer:
A budget is part of a financial plan.
Explanation:
Financial work is anything having to do with money, and a budget is a plan for spending money. Therefore, budgets are part of a finance plan!!
You get a part time job through an employment service. The service charges you ten percent of your forst weeks pay as payment for getting the job. tax or no tax
Answers
Answer:
No tax
Explanation:
PLEASE HELP!
If a company reported total sales of $59,919, cost of goods sold of $21,112, gross income of $38,807, operating expenses of $18,005 and a gross profit ratio of 65%, what was the company's operating income? (Round to the nearest dollar)
a) -$18,005
b) $20,802
c) $25,225
d) $38,807
Answers
Answer:
b) $20,802
Explanation:
Operating income, also called operating profit, is the income after deducting the operating expenses. In other words, it is gross profit minus operating expenses.
Operating expenses exclude taxes and interest.
Operating income will be calculated using the formula.
Gross profit -operating expenses = operating income
i.e,. Revenue- Costs of goods sold -operating expenses = operating income
=$59,919 - $21,112, -$18,005 =operating income
Operating income = $20, 802
On July 1, 2020, Ivanhoe Co. pays $13,860 to Shamrock Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. For Ivanhoe Co., journalize the entry on July 1 and the adjusting entry on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
Account Titles and Explanation Debit Credit Date
Answers
On July 1, 2020, Ivanhoe Co. would record the payment of $13,860 to Shamrock Insurance Co. as follows: Debit Prepaid Insurance $13,860 and Credit Cash $13,860.
On December 31, 2020, Ivanhoe Co. would make an adjusting entry to recognize the portion of the insurance that has expired. They would Debit Insurance Expense $4,620 and Credit Prepaid Insurance $4,620.
On July 1, 2020, Ivanhoe Co. paid $13,860 to Shamrock Insurance Co. for a 3-year insurance policy. The journal entry for this transaction would involve debiting the Prepaid Insurance account and crediting the Cash account with $13,860. This initial entry reflects the exchange of cash for the prepaid insurance policy.
On December 31, Ivanhoe Co. needs to make an adjusting entry to recognize the portion of the insurance policy that has been used up or expired. Since the policy covers a period of 3 years, the adjustment should be made at the end of each fiscal year. To record this adjustment, the Prepaid Insurance account is debited and the Insurance Expense account is credited with the portion of the policy that has been used or expired during the current fiscal year.
In summary, the initial journal entry on July 1 involves debiting Prepaid Insurance and crediting Cash, reflecting the payment for a 3-year insurance policy. The adjusting entry on December 31 involves debiting Prepaid Insurance and crediting Insurance Expense, recognizing the portion of the policy that has been used or expired during the fiscal year. These entries ensure the proper recognition of the insurance expense over the period covered by the policy.
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