Parrish Ch. 4 Pg. 101 4-5 11/25/19 For the following entries please identify if the entry is correct. If not correct the entry and explay WHY it is incorrect. Thank you. 1) To record depreciation on trucks for one year. The trucks cost $30000 and have no salvage value. They are being depreciated strait line over 6 years. Depreciation Expense $1500 Accumulated Depreciation $1500 2) To record one year's interest on a loan to an officer of the compnay. The loan was $10000 at 7% interest Interest Revenue $730 Interest Receivable $730 3) The Supplies account started with a balance of $1900. At the end of the period, a count of remaining supplies was indicated we had $563 left. Supplies Expense $563 Supplies $563 4) Employees have earned $1900 since last payday Wages Expense $1900 Wages Payable $1900 5) The company received a bill from the County Treasurer for $700 property taxes. The taxes are due next month 6) To record sales made on the last day of the year which company which the company has not yet billed Sales $2800 Accounts Receivable $2800 7) To record one month of rent expense. Three months ago, the company paid $8160 for one years rent Rent Expense $680 Prepaid Rent $680 8) The company received an electric bill for $800 for the current month. The bill is due next month. Utilities Expense $800 Utilities Payable $800 9) The supplies account had a balance of $2300 at the end of the month. The count at the end of the month showed a balance of $400 Supplies $1900 Supplies Expense $1900 10) The company performed $1000 of services which the client pay for in advance. Undearned service fees $1000 Service fee revenue $1000
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.
Parrish Ch. 4 Pg. 101 4-5 11/25/19
For the following entries please identify if the entry is correct. If not correct the entry and explay WHY it is incorrect. Thank you.
1) To record depreciation on trucks for one year. The trucks cost $30000 and have no salvage value. They are being
Depreciation Expense $1500
2) To record one year's interest on a loan to an officer of the compnay. The loan was $10000 at 7% interest
Interest Revenue $730
Interest Receivable $730
3) The Supplies account started with a balance of $1900. At the end of the period, a count of remaining supplies was indicated we had $563 left.
Supplies Expense $563
Supplies $563
4) Employees have earned $1900 since last payday
Wages Expense $1900
Wages Payable $1900
5) The company received a bill from the County Treasurer for $700 property taxes. The taxes are due next month
6) To record sales made on the last day of the year which company which the company has not yet billed
Sales $2800
7) To record one month of rent expense. Three months ago, the company paid $8160 for one years rent
Rent Expense $680
Prepaid Rent $680
8) The company received an electric bill for $800 for the current month. The bill is due next month.
Utilities Expense $800
Utilities Payable $800
9) The supplies account had a balance of $2300 at the end of the month. The count at the end of the month showed a balance of $400
Supplies $1900
Supplies Expense $1900
10) The company performed $1000 of services which the client pay for in advance.
Undearned service fees $1000
Service fee revenue $1000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
