The following items are taken from the adjusted trial balance of Blossom Company for the month ending July 31, 2020: Accounts payable Accounts receivable Accumulated depreciation - equipment Cash Depreciation expense Equipment Owner's capital 7/1/20 Service revenue Supplies $1,600 2,640 6,400 2,080 1,600 43,200 41,600 26,400 960
The following items are taken from the adjusted trial balance of Blossom Company for the month ending July 31, 2020: Accounts payable Accounts receivable Accumulated depreciation - equipment Cash Depreciation expense Equipment Owner's capital 7/1/20 Service revenue Supplies $1,600 2,640 6,400 2,080 1,600 43,200 41,600 26,400 960
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Prepare the current assets section of Blossom's classified balance sheet. (List Current Assets in order of liquidity.)
BLOSSOM COMPANY
Balance Sheet (Partial)
Assets
$
LA
1077
Transcribed Image Text:The following items are taken from the adjusted trial balance of Blossom Company for the month ending July 31, 2020:
Accounts payable
Accounts receivable
Accumulated depreciation - equipment
Cash
Depreciation expense
Equipment
Owner's capital 7/1/20
Service revenue
Supplies
$1,600
2,640
6,400
2,080
1,600
43,200
41,600
26,400
960
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