Accounting adjustments: Accounting adjustments can be called as the crucial step towards presenting the true and fair financial position of the companny. It involves performing adjustments in the accounting journals of the period. The adjustments are generally of accrued revenue, unearned revenue and prepaid expense, so as to record the revenues and expenses in the accounting period in which they have been incurred. To Classify: The given adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues ( AR ).

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A company purchases a machine for $150,000. It is estimated that the machine has a useful life of 10 years and will then be sold for $12,0000. Using the straight-line method, calculate the annual depreciation expense to be charged for each year of useful life. A. $13,800 B. $1,380 C. $12,500 D. $15,000 MCQ

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Chapter 3, Problem 3QS

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Concept Introduction:

Accounting adjustments: Accounting adjustments can be called as the crucial step towards presenting the true and fair financial position of the companny. It involves performing adjustments in the accounting journals of the period. The adjustments are generally of accrued revenue, unearned revenue and prepaid expense, so as to record the revenues and expenses in the accounting period in which they have been incurred.

To Classify: The given adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR).

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A company purchases a machine for $150,000. It is estimated that the machine has a useful life of 10 years and will then be sold for $12,0000. Using the straight-line method, calculate the annual depreciation expense to be charged for each year of useful life. A. $13,800 B. $1,380 C. $12,500 D. $15,000 MCQ

Walton Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 23,000 pounds of raw chicken that costs $15, 600, the company produces two parts: 4,000 pounds of drumsticks and 6,000 pounds of breast for a processing cost of $ 3,384. The chicken breast is further processed into 5,200 pounds of steak for a processing cost of $3,200. The market price of drumsticks per pound is $1.75 and the market price per pound of chicken steak is $5.20. If Walton decided to sell chicken breast instead of chicken steak, the price per pound would be $2.60. Product Allocation Rate x Weight of Base Allocated Cost Drumsticks $1.90 x 4,000 = $7,600 Chicken breast 1.90 x 6,000 = 11,400 Total allocated cost $19,000 Chicken Drumsticks Chicken Breast Revenue $7,000 $15,600 Cost of goods sold 7,600 11,400 Gross margin $(600) $4,200 Reallocate the joint…

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