8) Prohibition Ltd. trial balance at December 31, 20207, is shown below. Prepare the closing emtries Prohibition Ltd. Trial Balance December 31, 2020 Debit $16,400 Cash Credit Accounts receivable 2,500 Prepaid insurance 3,400 Prepaid rent 6,500 Supplies 3,700 Equipment 27,500 Accumulated depreciation-equipment $10.200 Furniture 15,000 Accumulated depreciation-fumiture 7,600 Accounts payable 5,400 Salary payable 1,400 Unearned revenue 6.500 Common shares 20,600 Retained earnings 15,800 Dividends 3,000 Fees earned 28,900 Salary expense 4.900 Depreciation expense-equipment 3,800 Depreciation expense-furniture 2,500 Rent expense 4,800 Insurance expense 1,200 Supplies expense 500 Advertising expense 200 $26.400 $96.400
8) Prohibition Ltd. trial balance at December 31, 20207, is shown below. Prepare the closing emtries Prohibition Ltd. Trial Balance December 31, 2020 Debit $16,400 Cash Credit Accounts receivable 2,500 Prepaid insurance 3,400 Prepaid rent 6,500 Supplies 3,700 Equipment 27,500 Accumulated depreciation-equipment $10.200 Furniture 15,000 Accumulated depreciation-fumiture 7,600 Accounts payable 5,400 Salary payable 1,400 Unearned revenue 6.500 Common shares 20,600 Retained earnings 15,800 Dividends 3,000 Fees earned 28,900 Salary expense 4.900 Depreciation expense-equipment 3,800 Depreciation expense-furniture 2,500 Rent expense 4,800 Insurance expense 1,200 Supplies expense 500 Advertising expense 200 $26.400 $96.400
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 10MC
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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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