Acct. No. 430 Date May 8, 20X1, through April 7, 20X2 July 18, 20X1 Sept. 22, 20X1 Feb. 6, 20X2 April 28, 20X2 April 30, 20X2 Description Maxwell Company Miscellaneous Revenue Year Ended April 30, 20X2 Proceeds of sale of scrap from manufacturing process (total of 12 monthly sales) Write-off of old outstanding checks; nos. 118-$500; 214-$400; 407-$200 Recovery of previously written off account receivable from Wilson Company Cash proceeds from sale of machine. Cost of $10,000 and accumulated depreciation of $8,000 as of Feb. 6, X2, not removed from accounts Refund of premium overcharge on fire insurance policy no. 1856, for period April 1, 20X2-Mar. 31, 20X3 Balance per ledger Y-Traced to cash receipts journal or general journal; vouched to appropriate supporting documents. C.M. May 19, X2 Reference Various CR GJ 7-4 CR 9-1 CR 2-1 CR 4-1 Q-2 Amount $5,843 Y 1,100 Y 4,381 Y 3,500 Y 600 Y $15,424 R.A.K. May 18, X2
Acct. No. 430 Date May 8, 20X1, through April 7, 20X2 July 18, 20X1 Sept. 22, 20X1 Feb. 6, 20X2 April 28, 20X2 April 30, 20X2 Description Maxwell Company Miscellaneous Revenue Year Ended April 30, 20X2 Proceeds of sale of scrap from manufacturing process (total of 12 monthly sales) Write-off of old outstanding checks; nos. 118-$500; 214-$400; 407-$200 Recovery of previously written off account receivable from Wilson Company Cash proceeds from sale of machine. Cost of $10,000 and accumulated depreciation of $8,000 as of Feb. 6, X2, not removed from accounts Refund of premium overcharge on fire insurance policy no. 1856, for period April 1, 20X2-Mar. 31, 20X3 Balance per ledger Y-Traced to cash receipts journal or general journal; vouched to appropriate supporting documents. C.M. May 19, X2 Reference Various CR GJ 7-4 CR 9-1 CR 2-1 CR 4-1 Q-2 Amount $5,843 Y 1,100 Y 4,381 Y 3,500 Y 600 Y $15,424 R.A.K. May 18, X2
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
Rita King, your staff assistant on the April 30, 20X2, audit of Maxwell Company, was transferred to another assignment before she could prepare the proposed adjusting journal entry for Maxwell's Miscellaneous Revenue account, which she had analyzed per the working paper given below. You have reviewed the working paper and are satisfied with King's procedures. You are convinced that all the miscellaneous revenue items should be transferred to other accounts. Maxwell Company's state of incorporation has an Unclaimed Properties Law.
Draft a proposed adjusting journal entry at April 30, 20X2, for Maxwell Company's Miscellaneous Revenue account.
Transcribed Image Text:Acct. No. 430
Date
May 8, 20X1,
through
April 7, 20X2
July 18, 20X1
Sept. 22, 20X1
Feb. 6, 20X2
April 28, 20X2
April 30, 20X2
Description
Maxwell Company
Miscellaneous Revenue
Year Ended April 30, 20X2
Proceeds of sale of scrap from
manufacturing process (total of
12 monthly sales)
Write-off of old outstanding checks;
nos. 118-$500; 214-$400; 407-$200
Recovery of previously written off
account receivable from Wilson
Company
Cash proceeds from sale of machine.
Cost of $10,000 and accumulated
depreciation of $8,000 as of Feb. 6,
X2, not removed from accounts
Refund of premium overcharge on
fire insurance policy no. 1856,
for period April 1, 20X2-Mar. 31, 20X3
Balance per ledger
Y-Traced to cash receipts journal or general journal;
vouched to appropriate supporting documents.
C.M.
May 19, X2
Reference
Various CR
GJ 7-4
CR 9-1
CR 2-1
CR 4-1
Q-2
Amount
$5,843 Y
1,100 Y
4,381 Y
3,500 Y
600 Y
$15,424
R.A.K.
May 18, X2
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