Given the above information, prepare the following: a. The necessary closing entries Example of Answer: Dr. Equipment 10,000 Cr. Cash 10,000 b. How much is the ending capital after the closing process? (Show your calculations)
Given the above information, prepare the following: a. The necessary closing entries Example of Answer: Dr. Equipment 10,000 Cr. Cash 10,000 b. How much is the ending capital after the closing process? (Show your calculations)
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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Transcribed Image Text:Question 14
Hadi Maintenance Company's adjusted trial balance at the end of 31 December, its accounting period is shown below:
Hadi Maintenance Company
Adjusted Trial Balance
December 31
Debit
Credit
Cash
23,500
Accounts receivable
13,000
Office supplies
6,000
Office equipment
29,600
Accumulated depreciation-Office
equipment
Long-term notes payable
5,000
24,500
26,160
Hadi, Capital
1,000
Hadi, Withdrawals
73,000
Fees earned
Salaries expense
32,800
16,000
Rent expense
3,960
Depreciation expense-Office equipment
2,800
Office supplies expense
$128,660
$128,660
Totals
Transcribed Image Text:Given the above information, prepare the following:
a. The necessary closing entries
Dr. Equipment 10,000
10,000
Example of Answer:
Cr. Cash
b. How much is the ending capital after the closing process? (Show your calculations)
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