Depreciation Methods
Units of production accumulated depreciation if
Cost: $50,000
Residual Value: $5,000
Useful Life: 100,000 miles
4 Years
Year 1: 30,000 miles
Year 2: 50,000 miles
Year 3: 30,000 miles
45,000
Initial J/E if we lent
$400,000
5%
4 years
N/R 400,000
Cash 400,000
Initial J/E if we lent out $700,000
10%
3 Years
Cash 700,000
N/P 700,000
Gross pay if worked 55 hours at $20/hour
1,250
Direct write off $300 J/E
Bad Debt Expense 300
A/R 300
Double Declining if year 1 deprecation expense
cost: $50,000
Residual value: 5,000
years 4
25,000
Formula for Interest Revenue
Face * % * #of months/12
Formula for Cash in second part of Receipt
Face * % * Number of Years
Fica if gross pay is $1,250
Medicare 1.45%
Social Security 6.2%
95.63
Someone who owed $3,000 went bankrupt
Allowance 3,000
A/R 3,000
Difference between capital and ordinary expenditures
Capital: To use the asset
Ordinary: to pro long the life of an asset
First Receipt Journal entry if we lent
$400,000
5%
4 years
Cash $400,000
N/R $400,000
First Receipt J/E if on 7/1/2020 we lent $700,000
10%
3 Years
N/P 700,000
Cash 700,000
Net Pay if
Gross Pay $1250
Medicare 1.45%
Social Security 6.2%
Federal Withholding $65
Health Insurance $100
989.37
Someone we had previously written off won the lottery and paid us $1,000 of their $4,000 owed
A/R 1,000
Allowance 1000
Cash 1,000
A/R 1,000
Double Declining Year 4 Depreciation Expense if
Cost: $50,000
Residual Value: $5,000
4 years
1250
Adjusting Journal Entries if on 7/1/20 we lent
$400,000
5%
4 years
Int Rec 10,000, 20,000, 20,000, 20,000
Int Rev 10,000, 20,000, 20,000, 20,000
Adjusting Journal Entries if on 7/1/2020 we
Lent $700,000
3 years
10%
Int Expense 35,000, 70,000, 70,000
Int Pay 35,000, 70,000, 70,000
Payroll J/E if
Gross pay $1250
Medicare 1.45%
Social Security 6.2%
Suta $50
Futa $60
Federal Withholding $75
Health care $100
Wages Expense 1250
Medicare Pay 18.13
Social Security Pay 77.5
FW Pay 75
Health care pay 100
Cash 979.37
Journal Entry of estimation if
2,000,000 sales
30% cash
4% Uncollectable
B/B $800 Credit
Bad Debt Expense 56,000
Allowance 56,000
Straight line year 1 depreciation expense if asset bought on 6/31
Cost: $50,000
Residual Value: $5,000
Years 4
5,625
Second Receipt J/E if on 7/1/20 we lent
$400,000
5%
4 years
Cash 80,000
Int Rec 70,000
Int Rev 10,000
Second Receipt J/E if on 7/1/2020 we
Lent $700,000
3 Years
10%
Int Expense 35,000
Int Pay 175,000
Cash 210,000
Payroll Tax J/E if
Gross pay $1250
Medicare 1.45%
Social Security 6.2%
Suta $50
Futa $60
Federal Withholding $75
Health care $100
Payroll Tax Expense 305.63
Medicare pay 18.13
Social Security Pay 77.5
Suta Pay 50
Futa Pay 60
Health Care Pay 100
Journal Entry of estimation if $300,000 of A/R due in 30 days is 4%, $500,000 due in 90 days is 5%, and old accounts of $100,000 is 10%
B/B $600 Debit
Bad Debt Expense 47,600
Allowance 47,600