Once an asset is fully depreciated, no additional depreciation can be taken even though
the asset is still being used by the business.
Answer:
Journalize the following transactions for Xiu Xiu Company for June 2015, the
company’s first month of operations. You may omit explanations for the transactions.
1> Purchased equipment on account for $9,000.
2> Billed customers $5,000 for services performed.
3> Made payment of $2,300 on account for equipment purchased earlier in month.
4> Collected $2,900 on customer accounts.
Answer:
The gross profit method is based on the assumption that the rate of gross profit remains
constant from one year to the next.
Answer:
A ratio can be expressed as a percentage, a rate, or a proportion.
Answer:
The adjusted trial balance of Sodajerk Company at December 31, 2015 includes the
following accounts: Retained Earnings $12,600; Dividends $7,000; Service Revenue
$38,000; Salaries and Wages Expense $13,000; Insurance Expense $2,000; Rent
Expense $3,500; Supplies Expense $2,500; and Depreciation Expense $2,000. Prepare a
retained earnings statement for the year.
Answer:
Alvarado Company purchased a new machine for $400,000. It is estimated that the
machine will have a $40,000 salvage value at the end of its 5-year useful service life.
The double-declining-balance method of depreciation will be used.
Instructions
Prepare a depreciation schedule which shows the annual depreciation expense on the
machine for its 5-year life.
Answer: