ion to answer the following 4 questions. Accounts payable 20,000 Cash 55,000 Interest Expense 20,000 Salary payable 1,000 Drawings 2,000 Share capital 8,000 Accounts receivable 30,000 Loans payable(>1yr)
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.
Use the following information to answer the following 4 questions.
| Accounts payable | 20,000 |
| Cash | 55,000 |
| Interest Expense | 20,000 |
| Salary payable | 1,000 |
| Drawings | 2,000 |
| Share capital | 8,000 |
| 30,000 | |
| Loans payable(>1yr) | 110,000 |
| Bank Charges | 70 |
| Property,plant and equipment | 200,000 |
| 5,000 | |
| Inventory | 20,000 |
| Supplies | 6,000 |
1.Use the information above to calculate current assets.
2.Use the information above to calculate current liabilities.
3.Calculate shareholders equity before the end of year entires are calculated.
4.At year end,Elliott counted the office supplies on hand,which amounted to $1500.The firm had $900 of supplies on hand at the start of the year, and had purchased $600 of supplies during the year.What was the total office supplies expense for the year?
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