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On October 1, Badlands Company rented warehouse space to a tenant for $2,500 per month. The tenant paid five months’ rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The company’s annual accounting period ends on December 31. The adjusting entry needed on December 31 is:

On January 1 of the current year, Josie’s Hoagie Co. reported stockholders’ equity totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year paid $20,000 in cash dividends. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in total stockholders’ equity during the year was:

Increases in equity from a company’s sales of products or services are:

Depot Train Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.

Increases in equity from a company’s sales of products or services are:

Owner financing refers to resources contributed by creditors or lenders.

The Extra Company acquired a building for $500,000. The building was appraised at a value of $575,000. The seller had paid $300,000 for the building 6 years ago. Which accounting principle would require Extra to record the building on its records at $500,000?

Woods Unlimited paid $4,800 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $4,800 and no adjustments had been made previously. The adjusting entry required on December 31 is:

Profit margin is defined as:

Depot Train Services had revenues of $80,000 and expenses of $50,000 for the year. Its assets at the beginning of the year were $400,000. At the end of the year assets were worth $450,000. Calculate its return on assets.