Question

Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase? Cost of 3,000 3,000 of Accounts payable QUESTION 8 pe Eve's Apples opened its business on January 1, 2018, and paid for two insurance policies effective that date. The liability policy was $36,000 for 18 months, and the crop damage polioy was $12,000 for a two-year 20187 term. What is the balance in Eve's prepaid insurance as of December 31 $30,000. $9,000. O $18,000. $48,000. QUESTION 9 In its first year of operations Acme Corp. had income before tax of $400,000. Acme made income tax payments totaling $150,000 during the year and has an income tax rate of 40%, what is the balance in income tax payable at the end of the year? $10,000 credit. $160,000 credit. $10,000 debit $150,000 credit.

Answer 1

	Question 7)
	Answer = Option 4
	Inventory	$                        2,000
	Account Payable		$                       2,000
	Question 8)
	Liability policy for one year =( $ 36,000 / 18 Months ) X 12 Months =	$                      24,000
	Balance in Prepaid = $ 36,000 - $ 24,000 =	$                      12,000
	Crop Damage policy expenses in one year = $ 12,000 / 2 Years =	$                        6,000
	Balance in Prepaid insurance = $ 12,000 - $ 6,000 =	$                        6,000
	Total Balance in prepaid = $ 12,000 + $ 6,000 =	$                      18,000
	Answer = Option C = $ 18,000
	Qustion 9)
	Income before Taxes =	$                  4,00,000
	Tax Payable @ 40% = $ 400,000 X 40% =	$                  1,60,000
	Less: Advance Paid =	$                  1,50,000
	Balance is payable as credit balance	$                      10,000
	Answer = Option 1 = $ 10,000 Credit
	Question 10)
	Answer = Option 4 =
	Cash
	Deferred Revenue
	Question 11)
	Answer = Option 3 = Debit to Liability
	Question 12)
	Answer = Option 1
	Cash	$                      12,000
	Deferred Revenue		$                    12,000
Note: as HOMEWORKLIB RULES answering guideline , we have to answer first three question in multiple questions but solved Six Questions