Question :In the recording of depreciation expense, which account is credited?
The accumulated depreciation account is credited.
It is the process of allocating the cost of fixed assets over the asset's useful life. It is reported in the income statement as an expense
Depreciation expense is recorded by debiting depreciation expense and crediting accumulated depreciation expense.
: Eastside Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period. Requirements 1. Record the journal entry to record the original receipt of $180,000 cash. 2. Record the adjusting entry that Eastside Magazine makes to record earning $8,000 in subscription revenue that was collected in advance. 3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances after adjustments. (Ignore the Cash account.)
Question :Chef ’s Catering completed the following selected transactions during May 2018: Learning Objectives 1, 2 Learning Objectives 1, 2 > Exercises May 1 Prepaid rent for three months, $2,400. 5 Received and paid electricity bill, $700. 9 Received cash for meals served to customers, $2,600. 14 Paid cash for kitchen equipment, $3,000. 23 Served a banquet on account, $2,800. 31 Made the adjusting entry for rent (from May 1). 31 Accrued salary expense, $1,600. 31 Recorded depreciation for May on kitchen equipment, $50. Date May 1 $(2,400) $0 Cash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Amount of Revenue (Expense) for May Requirements 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. 2. After completing the table, calculate the amount of net income or net loss for Chef ’s Catering under the accrual basis and cash basis accounting systems for May. 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Chef ’s Catering? Why?
On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero. Requirements 1. Calculate the amount of depreciation for the month of October using the straightline depreciation method. 2. Record the adjusting entry for depreciation on October 31. 3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation— Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31. 4. What is the computer equipment’s book value on October 31?
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