Prepare a post-closing trial balance sheet based on the following Accounts payable 6,300 Accounts Receivable 9,000 Accumulated Depreciation Building 41,000 Accumulated Depreciation Equipment $4,200 Building 350,000 Cash $98,000 Depreciation expense, building 7,000 Depreciation expense, equipment 800 Insurance expense 5,200 Interest payable 2,000 Land 700,000 Long-term note payable 52,000 Mike Jones, Capital 1,010,000 Mike Jones, Withdrawals 200,500 Office equipment 8,000 Office supplies 3,300 Prepaid Insurance 9,000 Prepaid Rent 15,000 Rent expense 6,000 Salaries expense 89,000 Salaries payable 14,500 Service fees earned 370,800 Totals $1,500,800 $1,500,800
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.
|
Accounts payable |
|
6,300 |
|
|
9,000 |
|
|
|
|
41,000 |
|
Accumulated Depreciation Equipment |
|
$4,200 |
|
Building |
350,000 |
|
|
Cash |
$98,000 |
|
|
Depreciation expense, building |
7,000 |
|
|
Depreciation expense, equipment |
800 |
|
|
Insurance expense |
5,200 |
|
|
Interest payable |
|
2,000 |
|
Land |
700,000 |
|
|
Long-term note payable |
|
52,000 |
|
Mike Jones, Capital |
|
1,010,000 |
|
Mike Jones, Withdrawals |
200,500 |
|
|
Office equipment |
8,000 |
|
|
Office supplies |
3,300 |
|
|
Prepaid Insurance |
9,000 |
|
|
Prepaid Rent |
15,000 |
|
|
Rent expense |
6,000 |
|
|
Salaries expense |
89,000 |
|
|
Salaries payable |
|
14,500 |
|
Service fees earned |
|
370,800 |
|
Totals |
$1,500,800 |
$1,500,800 |
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