The following items are taken from the financialtatements of the Freight Service for the year endingDecember 31, 2016:Accountsayable19,000ccountseceivable3,000ccumulated depreciation -quipmentdvertising expenseCash15,000Owner's capital (1/1/16)104,000Owner's drawings21,20011,000Depreciation expensensurance expense3,800ote payable, due 6/30/1772,000Cent expenserepaid insurance (12-month policy)7,20012,000Service revenueSuppliesSalaries and wages expense32,000quipment16,000135,000Supplies expense5,0006,000210,00026,000What are total current liabilities at December 31,016?Gelect one:O a. $91,000Ob. $72,000c. $19,000

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Description: The following items are taken from the financialtatements of the Freight Service for the year endingDecember 31, 2016:Accountsayable19,000ccountseceivable3,000ccumulated depreciation -quipmentdvertising expenseCash15,000Owner's capital (1/1/16)104,0

Current liabilities are financial obligations of a business entity that are due and payable within a…

Business

Accounting

he following items are taken from the financial atements of the Freight Service for the year ending ecember 31, 2016: ccounts ayable 19,000 ccounts eceivable 3,000 ccumulated depreciation - quipment dvertising expense ash 21,200 15,000 wner's capital (1/1/16) 104,000 26,000

he following items are taken from the financial atements of the Freight Service for the year ending ecember 31, 2016: ccounts ayable 19,000 ccounts eceivable 3,000 ccumulated depreciation - quipment dvertising expense ash 21,200 15,000 wner's capital (1/1/16) 104,000 26,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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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Question

The following items are taken from the financial
tatements of the Freight Service for the year ending
December 31, 2016:
Accounts
ayable
19,000
ccounts
eceivable
3,000
ccumulated depreciation -
quipment
dvertising expense
Cash
15,000
Owner's capital (1/1/16)
104,000
Owner's drawings
21,200
11,000
Depreciation expense
nsurance expense
3,800
ote payable, due 6/30/17
72,000
Cent expense
repaid insurance (12-month policy)
7,200
12,000
Service revenue
Supplies
Salaries and wages expense
32,000
quipment
16,000
135,000
Supplies expense
5,000
6,000
210,000
26,000
What are total current liabilities at December 31,
016?
Gelect one:
O a. $91,000
O
b. $72,000
c. $19,000

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