December 31, 2020. Account Description Accounts payable Accounts receivable Utilities payable Allowance for doubtful accounts Cash Accumulated amortization, patent Accumulated depreciation, vehicle 62,000 Prepaid rent Land Post-closing Trial Balance as of December 31, 2020 Balance Revenue 25,000 70,000 12,000 5,000 3,500 31,000 55,000 75,000 525,000 Account Description Unearned revenues Vehicle Accumulated depreciation, equipment Line, Capital Depreciation expense Equipment Salaries payable Notes payable** Other expenses Patent **550.000 of the potes payable will be paid by December 31 2021 92,000 Balance 80,000 150,000 300,000 53,000 450,000 5,500 146,000 333,000 40,000
December 31, 2020. Account Description Accounts payable Accounts receivable Utilities payable Allowance for doubtful accounts Cash Accumulated amortization, patent Accumulated depreciation, vehicle 62,000 Prepaid rent Land Post-closing Trial Balance as of December 31, 2020 Balance Revenue 25,000 70,000 12,000 5,000 3,500 31,000 55,000 75,000 525,000 Account Description Unearned revenues Vehicle Accumulated depreciation, equipment Line, Capital Depreciation expense Equipment Salaries payable Notes payable** Other expenses Patent **550.000 of the potes payable will be paid by December 31 2021 92,000 Balance 80,000 150,000 300,000 53,000 450,000 5,500 146,000 333,000 40,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Using the information provided, prepare a classified balance sheet for Line Laundry as at
December 31, 2020.
Account Description
Accounts payable
Accounts receivable
Utilities payable
Allowance for doubtful
accounts
Cash
Accumulated
amortization, patent 12,000
Accumulated
depreciation, vehicle
Prepaid rent
Land
Post-closing Trial Balance
as of December 31, 2020
Balance
Revenue
25,000
70,000
62,000
5,000
3,500
31,000
55,000
75,000
525,000
Account Description
Unearned revenues
Vehicle
Accumulated depreciation,
equipment
Line, Capital
Depreciation expense
Equipment
Salaries payable
Notes payable**
Other expenses
Patent
**$50,000 of the notes payable will be paid by December 31, 2021.
92,000
80,000
Balance
150,000
300,000
53,000
450,000
5,500
146,000
333,000
40,000
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