Prepare the following adjusting entries as of 9/30/21: 1 Depreciation using the straight-line method, full month: a. 9/3 Equipment has a useful life of 5 years; no salvage. b. 9/3 Building has a useful life of 10 years; 600 salvage. c. 9/10 Equipment has a useful life of 5 years; no salvage 2 The note payable is a 90-day note given to the bank September 6, 2021 and bearing interest at 8% (use 360 days for denominator to compute prorated interest for the month). Prorate interest for the month. 3 50 coupons were redeemed during September for either a round of miniature golf, or for a bucket of balls. 4 Salaries accrued but unpaid were $375. 5 Of the supplies purchased on 9/6, 1/3 had been used. 6 One month of insurance had expired. 7 Three Oaks will need to bill for a birthday party held on 9/30 for $300. 8 Maintenance expense for the month of September is estimated to be $975. General Journal Date Account Titles Debit Credit 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30
Prepare the following adjusting entries as of 9/30/21: 1 Depreciation using the straight-line method, full month: a. 9/3 Equipment has a useful life of 5 years; no salvage. b. 9/3 Building has a useful life of 10 years; 600 salvage. c. 9/10 Equipment has a useful life of 5 years; no salvage 2 The note payable is a 90-day note given to the bank September 6, 2021 and bearing interest at 8% (use 360 days for denominator to compute prorated interest for the month). Prorate interest for the month. 3 50 coupons were redeemed during September for either a round of miniature golf, or for a bucket of balls. 4 Salaries accrued but unpaid were $375. 5 Of the supplies purchased on 9/6, 1/3 had been used. 6 One month of insurance had expired. 7 Three Oaks will need to bill for a birthday party held on 9/30 for $300. 8 Maintenance expense for the month of September is estimated to be $975. General Journal Date Account Titles Debit Credit 9/30 9/30 9/30 9/30 9/30 9/30 9/30 9/30
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
| Prepare the following |
|||||||
| 1 | |||||||
| a. 9/3 Equipment has a useful life of 5 years; no salvage. | |||||||
| b. 9/3 Building has a useful life of 10 years; 600 salvage. | |||||||
| c. 9/10 Equipment has a useful life of 5 years; no salvage | |||||||
| 2 | The note payable is a 90-day note given to the bank September 6, 2021 and | ||||||
| bearing interest at 8% (use 360 days for denominator to compute prorated interest for the month). | |||||||
| Prorate interest for the month. | |||||||
| 3 | 50 coupons were redeemed during September for either a round of miniature | ||||||
| golf, or for a bucket of balls. | |||||||
| 4 | Salaries accrued but unpaid were $375. | ||||||
| 5 | Of the supplies purchased on 9/6, 1/3 had been used. | ||||||
| 6 | One month of insurance had expired. | ||||||
| 7 | Three Oaks will need to bill for a birthday party held on 9/30 for $300. | ||||||
| 8 | Maintenance expense for the month of September is estimated to be $975. | ||||||
| General Journal | ||||
| Date | Account Titles | Debit | Credit | |
| 9/30 | ||||
| 9/30 | ||||
| 9/30 | ||||
| 9/30 | ||||
| 9/30 | ||||
| 9/30 | ||||
| 9/30 | ||||
| 9/30 |
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