Depreciation on the company's equipment for the year is computed to be $14,000. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that
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Depreciation on the company's equipment for the year is computed to be $14,000.- The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $540 of unexpired insurance coverage remains.
- The Supplies account had a $430 debit balance at the beginning of the year, and $2,680 of supplies were purchased during the year. The December 31 physical count showed $507 of supplies available.
- One-fourth of the work related to $11,000 of cash received in advance was performed this period.
- The Prepaid Rent account had a $5,300 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $4,760 of prepaid rent had expired.
- Wage expenses of $6,000 have been incurred but are not paid as of December 31.
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- Chem-Lite, Inc., maintains its accounts on the basis of a fiscal year ending March 31. At March 31, 20X1, the Equipment account in the general ledger appeared as shown below. The company uses straight-line depreciation, a 10-year life, and 10 percent salvage value for all its equipment. It is the company’s policy to take a full year’s depreciation on all additions to equipment occurring during the fiscal year, and you may treat this policy as a satisfactory one for the purpose of this problem. The company has recorded depreciation for the fiscal year ended March 31, 20X1. Equipment 4/1/X0 Bal. forward 170,000 12/1/X0 11,200 1/2/X1 1,074 2/1/X1 1,074 3/1/X1 1,074 Upon further investigation, you find the following contract dated December 1, 20X0, covering the acquisition of equipment: List price $ 44,000 5% sales tax 2,200 Total $ 46,200 Down payment 11,200 Balance 35,000 9% interest, 24 months 6,300 Contract amount $ 41,300 Required: Prepare the adjusting entries you would propose as…A company uses straight-line depreciation (round to the nearest whole month) and adjusts its accounts annually on 31 December. On 1 January 2016, A purchased a van for $450,000 which has an estimated useful life of 9 years and no residual value. On 1 January 2021, the company incurred the following expenditure on the van: (i) $1,500 for annual maintenance and servicing (ii) $60,000 to upgrade the van with a new and more powerful engine (iii) $1,000 to paint the van after 5 years of use. On 1 January 2021, the useful life of the van was revised to 13 years with a residual value of $15,000. Required: (a) What is the book value of the van as at 31 December 2020? (b) Journalize annual depreciation of the van on 31 December 2021. Show workings.A company purchased a machine at the cost of $759,600 on March 1 of year 1. On the same day, the business paid the shipping company $5,600 to deliver the machine and paid $14,500 to another business to install and test the new machine. The annual insurance policy for the new machine is $8,600. The company’s fiscal year end is November 30. The company’s accounting policy is to depreciate all machines using the double diminishing balance method. The machine has an expected useful lifespan of five-years and an estimated residual value of $30,000. However, the company discovered the machine did not meet its business requirements, so it sold the machine on September 1, year 3, for $156,500. Perform all your calculations to the nearest dollar. Show all your work. Instructions: Write you answers by hand, scan your working papers and upload to the link on the main page of the Moodle website as a PDF file. Show any calculations. Printing the problem information is permitted but only for…
- On December 31, Strike Company traded in one of its batting cages for another one that has a cost of $535,416. Strike receives a trade-in allowance of $32,685.39. The old equipment had an initial cost of $242,114 and has accumulated depreciation of $205,796.90. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction? a.gain of $32,685.39 b.no loss or gain will be recorded c.loss of $3,631.71 d.gain of $3,631.71Chahal Company’s fiscal year-end is December 31. The company purchased a machine costing $129,000 on April 1, 2022. The machine is expected to be obsolete after five years (60 months), and thereafter no longer useful to the company. The estimated salvage value is $6,000. The company’s depreciation policy is to record depreciation for the portion of the year that the asset is in service. Compute depreciation expense for 2022 under the straight‑line depreciation method. (Round your answer to the nearest whole number. Do not include a $ sign in your answer.)MCC company uses straight-line depreciation (round to the nearest whole month) and adjusts its accounts annually on 31 December. On 1 January 2016, MCC purchased a van for $450,000 which has an estimated useful life of 9 years and no residual value. On 1 January 2021, the company incurred the following expenditure on the van: (i) (ii) (iii) $1,500 for annual maintenance and servicing $60,000 to upgrade the van with a new and more powerful engine $1,000 to paint the van after 5 years of use. On 1 January 2021, the useful life of the van was revised to 13 years with a residual value of $15,000. Required: (a) What is the book value of the van as at 31 December 2020? (b) Journalize annual depreciation of the van on 31 December 2021. Show workings.
- Depreciation on the company’s wind turbine equipment for the year is $6,700. The Prepaid Insurance account for the solar panels had a $3,700 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $1,450 of unexpired insurance coverage remains at year-end. The company received $8,100 cash in advance for sustainability consulting work. As of December 31, one-third of the sustainability consulting work had been performed. As of December 31, $2,900 in wages expense for the organic produce workers has been incurred but not yet paid. As of December 31, the company has earned, but not yet recorded, $570 of interest revenue from investments in socially responsible bonds. The interest revenue is expected to be received on January 12. Required For each of the above separate cases, prepare the required December 31 year-end adjusting entries. Depreciation on the company’s wind turbine equipment for the year is $6,700. Prepaid…Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2017, the company purchased a machine costing $117,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $17,200. Depreciation for partial years is recorded to the nearest full month. In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2021. a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on January 11, 2017. Show separately the recording of depreciation expense in 2017 through 2021. (Do not round intermediate calculations. Round…Last year, Mountain Top, Incorporated, purchased a coal mine at a cost of $900,000. The salvage value has been estimated at $100,000. The coal mine has an estimated 200,000 tons of available coal. A total of 70,000 tons were mined and sold during the current year. Complete the necessary adjusting journal entry to record depletion expense for the current year by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns. View transaction list Journal entry worksheet 1 Last year, Mountain Top, Inc., purchased a coal mine at a cost of $900,000. The salvage value has been estimated at $100,000. The coal mine has an estimated 200,000 tons of available coal. A total of 70,000 tons were mined and sold during the current year. Note: Enter debits before credits. Date Dec. 31 General Journal Debit Credit >
- Travis Inc. has just completed its financial statements for the reporting year ended December 31 of Year 5. Pretax income is $160,000. The accounts have not been closed for December 31 of Year 5. Further consideration and review of the records revealed the following items related to the Year 5 statements.1. On January 1 of Year 1, a machine was acquired that cost $10,000. The estimated useful life was 10 years, and the residual value was $2,000 . At the time of acquisition, the full cost of the machine was incorrectly debited to the land account. The company uses straight-line depreciation.2. On January 1 of Year 3, a long-term investment of $18,000 was made by purchasing a $20,000, 8% bond of FDC Corporation. The investment account was debited for $18,000. Each year, starting on December 31 of Year 3, the company has recognized and reported investment revenue on these bonds of $1,600. The bonds mature in 10 years from the date of purchase. Assume that any amortization would follow the…On January 2, Jones Company paid $33,600 to purchase equipment that has a useful life of 8 years. The equipment will be depreciated equally over the 8-year period as depreciation expense. The cost of $33,600 is divided by the useful life of 8 years to determine the amount of the yearly depreciation expense of $4,200. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (b) Net income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)? Revenue: Expense: Net Income: Assets: Income Statement Accounts Liabilities: ✓ Choose One }, {online Understated Overstated No Effect Balance Sheet Accounts Choose One }, {online Choose One }, {online Retained Earnings: Choose One },{online ✓On April 30, Year 1, Tilton Products purchased machinery for $44,000. The machinery is expected to have an 8-year life and an estimated residual value of $4,000. Tilton uses a calendar year-end for financial reporting. Refer to the information above. In Year 7, Tilton Products sells this machinery for $2,000. At the date of sale, the machinery had been depreciated by Tilton Products to its estimated residual value of $4,000. This sale results in Multiple Choice No gain or loss in either the financial statements or the income tax return. A $2,000 loss in the financial statements; a $2.000 gain in the income tax return. A $2,000 loss in both the company's financial statements and its income tax return A $2,000 loss in the financial statements, but no gain or loss in the income tax return.