included in its trial balance immediately prior to preparing the financial stater ON TIME CORPORATION Adjusted Trial Balance At May 31, 2016 (millions of dollars) Debit Credit $ 3,600 Accounts Payable Accounts Receivable Accumulated Depreciation 24 $ 5,700 20,300 5,600 Cash 3,400 Common Stock 3,100 240 Depreciation Expense Dividends Equipment Goodwill Income Tax Expense Income Tax Payable Interest Expense Interest Receivable 39,500 4,500 1,250 1,250 170 80 Interest Revenue 90 8,400 650 Notes Payable (long-term) Notes Payable (short-term) Office Expenses Prepaid Rent Rent Expense Repairs and Maintenance Expense Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Service Revenue Supplies Transportation Expense 7,610 1, 200 3,200 2,600 16,680 17,300 2,400 48,400 520 12,600 $105,170 $105,170
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.
![included in its trial balance immediately prior to preparing the financial stater
ON TIME CORPORATION
Adjusted Trial Balance
At May 31, 2016
(millions of dollars)
Debit
Credit
$ 3,600
Accounts Payable
Accounts Receivable
Accumulated Depreciation
24
$ 5,700
20,300
5,600
Cash
3,400
Common Stock
3,100
240
Depreciation Expense
Dividends
Equipment
Goodwill
Income Tax Expense
Income Tax Payable
Interest Expense
Interest Receivable
39,500
4,500
1,250
1,250
170
80
Interest Revenue
90
8,400
650
Notes Payable (long-term)
Notes Payable (short-term)
Office Expenses
Prepaid Rent
Rent Expense
Repairs and Maintenance Expense
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Service Revenue
Supplies
Transportation Expense
7,610
1, 200
3,200
2,600
16,680
17,300
2,400
48,400
520
12,600
$105,170
$105,170](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d003846-c05b-4214-83fd-fc526cb2a4e1%2Fd628491d-af43-42a6-af71-601fb82cb7df%2Fns2neh.jpeg&w=3840&q=75)
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Balance Sheet shows the financial position of the company at a particular point of time. It lists the summary of account balances remaining open in the books of accounts after closure of an accounting period.
It is drawn up as Company’s Assets on one side and Company’s Equity & Liabilities on another side. And total balance of both the sides are equal.
Income Statement represents the Net Income by deducting all the expenses incurred during the year from the revenue earned during the year. The net income is added to the retained earnings and shown on the Equity & Liabilities side under Stockholder’s Equity.
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