Adjusting Entries
Depreciation on the company’s equipment for the year is $6,000
Debit Depreciation Expense - Equipment and credit accumulated depreciation - equipment for 6,000
Would outstanding checks be adjusted as an addition/deduction to the bank/book balance?
Deduction from the Bank
Purchased merchandise for $2,600 on terms of 2/5, n/30, FOB shipping point, invoice dated November 1.
Debit Merchandise Inventory & Credit Accounts Payable for $2,600
How is annual depreciation calculated using the Straight-Line Depreciation method?
(Cost - Salvage Value) / Useful Life
The ledger includes the following accounts with normal balances as of December 31: Capital $9,700; Withdrawals $1,150; Services Revenue $20,000; Wages Expense $11,900; and Rent Expense $3,000.
Prepare its December 31 entries to close revenue & expense accounts
DR Income Summary 14,900, CR Wages Exp 11,900 & CR Rent Exp 3,000
As of December 31, $2,000 in wages expense for employees has been incurred but not yet paid.
Debit wages expense and credit wages payable for $2,000
Would a banking fee be an addition/deduction to the bank/book balance?
Deduction from the Book
Payment is made within the discount period for merchandise previously purchased on credit totaling $2,600 with terms of 2/5, n/30
Debit Accounts Payable for $2,600, Credit Merchandise Inventory for $52, & Credit Cash for $2,548
How do you calculate depreciation of a partial year using straight-line depreciation?
Annual Depreciation x Fraction of year (Months owned/12)
The ledger includes the following accounts with normal balances as of December 31: Capital $9,700; Withdrawals $1,150; Services Revenue $20,000; Wages Expense $11,900; and Rent Expense $3,000.
Prepare its December 31 entries to close income summary & withdrawal accounts
DR Income Summary & CR Owner Capital 5,100
DR Owner Capital & Credit Owner Withdrawal 1,150
The Prepaid Insurance account for the solar panels had a $2,300 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $750 of unexpired insurance coverage remains at year-end.
Debit insurance expense and credit prepaid insurance for $1,550
Would an NSF check be an addition/deduction to the bank/book balance?
Deduction from the Book
A company discovers and returns $200 of defective merchandise paid for with a 2% discount for a cash refund.
Debit Cash & Credit Merchandise Inventory for $196
On April 1, Cyclone Company purchases a trencher for $304,000. The machine is expected to last five years and have a salvage value of $52,000. Calculate it's annual depreciation expense using the straight-line method?
($304,000-$52,000) / 5 yrs = $50,400
Equipment costing $38,400 with a 8-year useful life and an estimated $6,400 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 4,000 units of product during its life. It produced 600 units in the first year. Calculate depreciation expense for the first year using the units of production method
(Cost 38,400 - SV 6,400)/(Units of Production 6,400) = $8 per unit x 600 units = $4,800
At December 31, the company has earned, but not yet recorded, $430 of interest revenue from bonds. The interest revenue is expected to be received on January 12.
Debit interest receivable and credit interest revenue for $430
Check No. 919, listed with the canceled checks, was correctly drawn for $389 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $398. What adjustment should be added/deducted to the bank/book balance?
$9 Addition to the Book Balance
A company pays $130 cash for transportation costs with terms of FOB shipping point
Debit merchandise inventory & credit cash for $130
On April 1, Cyclone Company purchases a trencher for $304,000. The machine is expected to last five years and have a salvage value of $52,000. What is depreciation expense as of Dec 31 of the first year using straight-line depreciation?
$50,400 x (9/12) = $37,800
Equipment costing $38,400 with a 8-year useful life and an estimated $6,400 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 4,000 units of product during its life. It produced 600 units in the first year. Calculate depreciation expense for the first year using the double declining balance method
100%/(Useful life in years) x 2 x Beg Book Value
(100% / 8) x 2 x $38,400 = $9,600
The company received $4,000 cash in advance for consulting work. As of December 31, one-fourth of the sustainability consulting work had been performed
Debit unearned revenue and credit consulting revenue for $1,000
Would cash receipts placed in the night deposit box on the last day of the month be adjusted as an addition/deduction to the bank/book balance?
Addition to the Bank
A company sells merchandise for $2,808 with terms n/30. The cost of the merchandise is $1,404.
Record Sale - DR Accounts Receivable & CR Sales Revenue for $2,808
Record Cost - DR Cost of Goods Sold & CR Merchandise Inventory for $1,404
On April 1, Cyclone Company purchases a trencher for $304,000. The machine is expected to last five years and have a salvage value of $52,000. What is depreciation expense as of Dec 31 of the second year using straight-line depreciation?
$50,400
The following amounts are from a company's adjusted trial balance: Wages Payable 1,180; Building 118,000; Cash 21,240; Int Payable 2.360; L. Juan, Capital 59,000; AR 8,260; Accum Depr-Bldg 35,400; Notes payable 60,180; Notes Rec 23,600; AP 12,980. Using these amounts, what are the total current assets, long-term investments, & plant assets on the classified balance sheet
Current Assets - $29,500; Long-term investments - $23,600; Plant Assets - $135,700