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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Equipment was purchased on January 1, 2018 and management determined a useful life of 8 years and a $10,000 salvage value. WHat is the amount and what accounts
![UNADJUSTED TB
ADJUSTMENTS
ADJUSTED TB
INCOME STATEMENT
BALANCE SHEET
December 31, 2021
December 31, 2021
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$
67,000
67,000
Short-term investments
62,000
62,000
Accounts receivable, net
68,000
68,000
Allowance for doubtful accounts
$
1,000
1,000
Supplies
56,000
56,000
Inventory
62,000
62,000
Prepaid insurance
48,000
48,000
Land
450,000
450,000
Equipment
210,000
210,000
Accumulated depreciation
75,000
75,000
Trademark
38,000
38,000
Accounts payable
39,000
39,000
Wages payable
Interest payable
Income tax payable
18,000
18,000
8,250
8,250
Unearned revenue
27,000
27,000
Long-term notes payable - due 03.01.23
60,000
60,000
Common stock, 50,000 shares issued and
outstanding
100,000
100,000
Retained earnings
220,000
220,000
Dividends
40,000
40,000
Sales revenue, net
1,592,964
1,592,964
Sales discount
1,368
1,368
Sales return and allowances
2,596
2,596
Interest revenue
Page 1
Cost of goods sold
683,100
683,100
Wages expense
240,000
240,000
Insurance expense
Bad debt expense
Supplies expense
113,150
113,150
Depreciation expense
Interest expense
44
3,600
Income tax expense
TOTALS
2 141 214
2 141 214
2 144 814
2 141 214](https://content.bartleby.com/qna-images/question/727e4093-8ead-4bf8-b086-0722c8766cbb/8a69c936-f176-4b47-8a72-6828b534d900/3vn69vt_thumbnail.png)
Transcribed Image Text:UNADJUSTED TB
ADJUSTMENTS
ADJUSTED TB
INCOME STATEMENT
BALANCE SHEET
December 31, 2021
December 31, 2021
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$
67,000
67,000
Short-term investments
62,000
62,000
Accounts receivable, net
68,000
68,000
Allowance for doubtful accounts
$
1,000
1,000
Supplies
56,000
56,000
Inventory
62,000
62,000
Prepaid insurance
48,000
48,000
Land
450,000
450,000
Equipment
210,000
210,000
Accumulated depreciation
75,000
75,000
Trademark
38,000
38,000
Accounts payable
39,000
39,000
Wages payable
Interest payable
Income tax payable
18,000
18,000
8,250
8,250
Unearned revenue
27,000
27,000
Long-term notes payable - due 03.01.23
60,000
60,000
Common stock, 50,000 shares issued and
outstanding
100,000
100,000
Retained earnings
220,000
220,000
Dividends
40,000
40,000
Sales revenue, net
1,592,964
1,592,964
Sales discount
1,368
1,368
Sales return and allowances
2,596
2,596
Interest revenue
Page 1
Cost of goods sold
683,100
683,100
Wages expense
240,000
240,000
Insurance expense
Bad debt expense
Supplies expense
113,150
113,150
Depreciation expense
Interest expense
44
3,600
Income tax expense
TOTALS
2 141 214
2 141 214
2 144 814
2 141 214
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- The following information is available on a depreciable asset: Purchase date January 1, Year 1 Purchase price $96,000 Salvage value $10,000 Useful life 10 years Depreciation method straight-line The asset's book value is $78,800 on January 1, Year 3. On that date, management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during Year 3 would be: Multiple Choice $7,880.00 $9,225.00 $8,600.00 $7,380.00 $9,850.00arrow_forwardA plant asset was purchased on January 1 for $120000 with an estimated salvage value of $10000 at the end of its useful life. The current year's Depreciation Expense is $10000 calculated on the straight-line basis and the balance of the Accumulated Depreciation account at the end of the year is $60000. The remaining useful life of the plant asset is 5 years. O. 11 years. O 12 years. O 7 years.arrow_forwardA machine was purchased for $72,000, has a 10-year useful life, and a $4,000 salvage value. What is its depreciation expense in year 2 using the sum of the years' digits method (rounded to the nearest dollar)? Select one: O a. 12,364 O b. 11,782 c. 13,091 d. 11,127 Oarrow_forward
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- A plant asset acquired on October 1, 2020, at a cost of $500,000 has an estimated useful life of 10 years. The salvage value is estimated to be $50,000 at the end of the asset's useful life. Instructions: determine the depreciation expense and accumulated depreciation for the first five years using: a. straight-line method b. double-declining-balance methodarrow_forwardbuild a modelA purchased machine cost $320,000, with delivery and installation charges amounting to $30,000. The declared salvage value was $50,000. Its useful life is 10 years. a) Compute the SL depreciation schedule over its useful life. b) Compute the DDB depreciation schedule over its useful life. c) Compute the MACRS depreciation schedule. Its ADR life is 12 years. d) Early in Year 4, the company changed its product mix and found that it no longer needed the machine. One of its competitors agreed to buy the machine for $110,000. Determine the loss, gain, or recapture on the sale. Use the MACRS schedulearrow_forward
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