FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Concept explainers
Topic Video
Question
How do I do the
( assuming FIFO for inventory)
Transactions and information for the year:
- Jan 1st. Spent $3,500 to improve the first piece of equipment purchased in Year 1. Revised useful life is 5 more years while the new salvage value is $2,000.
- Jan 2nd, ordered and received 200 units of inventory purchased on account for $13 each
- Jan 15th, paid $100 to settle a warranty claim from a customer.
- Feb 3rd, ordered and received 150 units of inventory purchased on account for $12 each
- Feb 22nd, sold 250 units of inventory at $65 each. $10,000 was on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.
- March 1st, incurred and paid $900 of wages expense
- Mar 30th, collected $5000 of
accounts receivable - April 1st, paid $50 to settle a warranty claim from a customer.
- May 2nd, Paid $4000 of accounts payable.
- June 1st, Paid $409 of taxes payable
- June 30th, made first interest payment on Note Payable (5% of $175,000 ).
- Aug 12th, wrote-off a $250 account receivable for a customer who filed for bankruptcy.
- Oct 12th, sold 100 units of inventory at $56 each. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.
- Dec 31st, spent $1,500 at end of year to repair equipment.
- Estimated that 2% of Year 2 sales on account would not be collected.
- Estimated tax rate is 35%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 4 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Subject:- Accountarrow_forwardWolfpack Corp. has determined it should record depreciation expense of $40,000 for the year ending 12/31/X7. Required: In the general journal below, complete the year-end entry to record depreciation. Debit Credit Dec 31 ? 40,000 ? 40,000arrow_forwardOn July 1, Harding Construction purchases a bulldozer for $228,000. The equipment has an 8-year life with a residual value of $16,000. Harding uses straight-line depreciation. a1. Calculate the depreciation expense for the first year ending December 31. 2$ a2. Provide the journal entry for the first year ending December 31. If an amount box does not require an entry, leave it blank. Dec. 31 b. Calculate the third year's depreciation expense and provide the journal entry for the third year ending December 31. If an amount box does not require an entry, leave it blank. Dec. 31 c1. Calculate the last year's depreciation expense. 2$ c2. Provide the journal entry for the last year. If an amount box does not require an entry, leave it blank. Dec. 31arrow_forward
- Office equipment purchased 5 1/2 years ago for $70,000, with an estimated life of 10 years and no residual value is sold for $20,000 cash. Journalize the following entries: (a) Record the depreciation for the one-half year prior to the sale, using the straight-line method. (b) Record the sale of the equipment. Date Account Title Debit Credit A Barrow_forwardRahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000.…arrow_forwardChuck Company purchases performs a major inspection on its machinery on 1 January 20X4 for $137,000. The company uses the straight-line method of depreciation. The company performs major inspections every 5 years. The bookkeeper erroneously expenses the entire amount to repairs and maintenance. The error is discovered at the end of 20X5. Required: Prepare the journal entry required in 20X5arrow_forward
- Presented here are selected transactions for Cullumber Limited for 2024. Cullumber uses straight-line depreciation and records adjusting entries annually. Jan. 1 Sold a delivery truck for $19.190 cash. The truck cost $67,530 when it was purchased on January 1, 2021, and was depreciated based on a four-year useful life with a $6,290 residual value. Sept. 1 Dec. 30 Sold computers that were purchased on January 1, 2022. They cost $11,628 and had a useful life of three years with no residual value. The computers were sold for $540 cash. Retired equipment that was purchased on January 1, 2015. The equipment cost $146,400 and had a useful life of 10 years with no residual value. No proceeds were received. Show Transcribed Text Gain on Disposal Vehicles Assume that, when the delivery truck was sold on January 1, the accountant only recorded a debit to Cash and a credit to Gain on Disposal. Because of this, also assume that the accountant recorded depreciation on this asset for 2024. What…arrow_forwardYear 1 account. January 1 Paid $262,000 cash plus $10,480 in sales tax and $1,500 in transportation (FOB shipping point) for a new loader. The loader is estimated to have a four-year life and a $26,200 salvage value. Loader costs are recorded in the Equipment January 3 Paid $7,000 to install air conditioning in the loader to enable operations under harsher conditions. This increased the estimated salvage value of the loader by another $2,100. December 31 Recorded annual straight-line depreciation on the loader. Year 2 January 1 Paid $4,300 to overhaul the loader's engine, which increased the loader's estimated useful life by two years. February 17 Paid $1,075 for minor repairs to the loader after the operator backed it into a tree. December 31 Recorded annual straight-line depreciation on the loader. Required: Prepare journal entries to record these transactions and events. View transaction list Journal entry worksheet > 1 2 3 4 5 6 Recorded annual straight-line depreciation on the…arrow_forwardYoshi Company completed the following transactions and events involving its delivery trucks. Year 1 Jan. 1 Paid $20,515 cash plus $1,485 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account. Dec. 31 Recorded annual straight-line depreciation on the truck. Year 2 Dec. 31 The truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,400. Recorded annual straight-line depreciation on the truck. Year 3 Dec. 31 Recorded annual straight-line depreciation on the truck. 31 Sold the truck for $5,300 cash. Required Prepare journal entries to record these transactions and events.arrow_forward
- Allyn Company purchased equipment costing $55,000 on January 1, Year 1. The equipment is estimated to have a salvage value of $5,000 and an estimated useful life of 5 years. Double-declining-depreciation is used, and all depreciation has been recorded as of December 31, Year 2. If the equipment is sold on December 31, Year 2 for $15,000, the journal entry to record the sale is: A.Debit Cash, $15,000; Debit Accumulated Depreciation, $22,000; Debit Loss on Sale, $18,000; Credit Equipment, $55,000. B. Debit Cash, $15,000; Debit Accumulated Depreciation, $13,200; Debit Loss on Sale, $26,800; Credit Equipment, $55,000. C. Debit Cash, $15,000; Debit Accumulated Depreciation, $35,200; Debit Loss on Sale, $4,800; Credit Equipment, $55,000. D. Debit Cash, $15,000; Debit Accumulated Depreciation, $40,000; Credit Equipment, $55,000. E. Debit Cash, $15,000; Debit Loss on Sale, $40,000; Credit Equipment, $55,000.arrow_forwardA motor van was bought on 1st January 2018 for $10,000 The policy is to depreciate the motor van at 20% on straight line method Required: Calculate the annual depreciation for the years ended 31st December 2018, 2019 and 2020. Show the following accounts for the three years Motor vehicles account. Accumulated depreciation account.arrow_forwardGamma purchases a motor vehicle on 30 September 20X1 for $15,000 on credit. Gamma has a policy of depreciating motor vehicles using the reducing balance method at 15% per annum, pro rata in the years of purchase and sale. What are the correct ledger entries to record the purchase of the vehicle at 30 September 20X1 and what is the depreciation charge for the year ended 30 November 20X1?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education