Fundamental Accounting Principles
Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 4APSA
To determine

Depreciation:

Depreciation means depletion in the value of the asset due to continued utilization in the processes. It turns the asset obsolete after a certain period of time.

Journal Entries:

Journal entries are the basic entries recoded as per the transactions being entered into by the business in its day to day operations in a chronological order.

Accounting rules regarding journal entries:

  • Balance increases when: assets, losses and expenses are debited and liabilities, gains and incomes get credited.
  • Balance decreases when: assets, losses and expenses get credited and liabilities, gains and incomes are debited.

To prepare:

Journal entries.

Expert Solution & Answer
Check Mark

Explanation of Solution

    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 1
    New loader

    287,600


    Sales tax

    11,500


    Transportation cost

    1,500


    Cash


    300,600

    (Being cost incurred for purchasing loader recorded)



     Table (1)

  • The loader is an asset for the company and by purchasing it; it will increase the asset of the company hence, debit new loader.
  • Sales tax is an expense and it decreases the asset of the company hence debit sales tax expenses.
  • Transportation cost is an expense for the company which decreases the asset of the company hence, debit transportation expenses.
  • On account of payment for the expenses, the cash as an asset is decreased hence credit cash account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan. 3
    Cab enclosing expenses

    4,800


    Cash


    4,800

    (Being expenses recorded for enclosing cab)



     Table (2)

  • Cab enclosing expenses decrease the assets of the company hence debit all expenses and losses.
  • Cash is an asset which is decreased by paying for cab enclosing expenses hence credit cash account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan. 3
    Depreciation

    70,850


    New loader


    70,850

    (Being annual straight line depreciation on loader recorded.)



     Table (3)

  • Depreciation is an expense which decreases the value of asset hence debit depreciation account.
  • New loader is an asset the value of which is decreased on depreciating the assets value hence credit new loader account.

2017

    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan 1
    Overhauling expenses

    5,400


    Cash


    5,400

    (Being overhauling expenses paid.)



     Table (4)

  • Overhauling expenses decrease the asset hence debit overhauling expenses.
  • Cash is an asset which is decreased on paying the overhauling expenses hence credit cash account.
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Feb. 17
    Repairs

    820


    Cash


    820

    (Being repair expenses paid in cash recorded)



     Table (5)

  • Repairs expenses decrease the asset hence debit overhauling expenses.
  • Cash is an asset which is decreased on paying the overhauling expenses hence credit cash account
    DateAccount Title and ExplanationPost refDebit($)Credit($)
    Jan. 3
    Depreciation

    43,590


    Loader


    43,590

    (Being annual straight line depreciation on loader recorded.)



     Table (6)

  • Depreciation is an expense which decreases the value of asset hence debit depreciation account.
  • Loader is an asset the value of which is decreased on depreciating the assets value hence credit new loader account.

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Chapter 10 Solutions

Fundamental Accounting Principles

Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - Prob. 16DQCh. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Cost of plant assets C1 Kegler Bowling installs...Ch. 10 - Assigning costs to plant assets C1 Q Listed below...Ch. 10 - Straight-line depreciation P1 On January 1= the...Ch. 10 - QS 10-' Units-of-production depreciation On...Ch. 10 - QS10-5 Double-declining-balance method P1 A...Ch. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures C3 1. Classify...Ch. 10 - Prob. 10QSCh. 10 - Natural resources and depletion P3 Perez Company...Ch. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Prob. 16QSCh. 10 - Exercise 10-1 Cost of plant assets C1 Q Rizio Co....Ch. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Exercise 104 Straight-line depreciation P1 Ramirez...Ch. 10 - Exercise 10-5 Units-of-production depreciation P1...Ch. 10 - Exercise 10-6 Double-declining-balance...Ch. 10 - Exercise 10-7 Straight-line depreciation P1 New...Ch. 10 - Exercise 10-8 Double-declining-balance...Ch. 10 - Exercise 10-9 Straight-line depreciation and...Ch. 10 - Exercise 10-10 Double-declining-balance...Ch. 10 - Exercise 10-11 Straight-line, partial-year...Ch. 10 - Exercise 10-12 Dauble-declining-balance....Ch. 10 - Exercise 10-13 Revising depreciation C2 Apex...Ch. 10 - Exercise 10-14 Ordinary repairs, extraordinary...Ch. 10 - Exercise 10.15 Extraordinary repairs; plant asset...Ch. 10 - Exercise 10-16 Disposal of assets P2 Diaz Company...Ch. 10 - Exercise 10-17 Partial-year depreciation: disposal...Ch. 10 - Exercise 10-18 Depletion of natural resources P3...Ch. 10 - Exercise 10-19 Amortization of intangible assets...Ch. 10 - Exercise 10-20 Goodwill P4 Robinson Company...Ch. 10 - Exercise 10-21 Preparing a balance sheet P1 P3...Ch. 10 - Exercise 10-22 Evaluating efficient use of assets...Ch. 10 - Exercise 10-23A Exchanging assets P5 Gilly...Ch. 10 - Prob. 24ECh. 10 - Problem 10-1A Plant asset costs; depreciation...Ch. 10 - Problem 1O-2A Depreciation methods P1 A machine...Ch. 10 - Problem 10-3A Asset cost allocation; straight-line...Ch. 10 - Problem 10-4A Computing and revising depreciation;...Ch. 10 - Problem 10-5A Computing and revising depreciation;...Ch. 10 - Problem 1O-6A Disposal of plant assets C1 P1...Ch. 10 - Problem 1O7A Natural resources P3 On July 23 of...Ch. 10 - Prob. 8APSACh. 10 - Problem 10-1B Plant asset costs; depreciation...Ch. 10 - Problem 10-28 Depreciation methods P1 On January...Ch. 10 - Problem 10-3B Asset cost allocation; straight-line...Ch. 10 - Prob. 4BPSBCh. 10 - Problem 10-5B Computing and revising...Ch. 10 - Problem 1O-6B Disposal of plant assets C1 P1 P2 On...Ch. 10 - Prob. 7BPSBCh. 10 - Prob. 8BPSBCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY