Question

Prepare the following journal entries:

1.The computer equipment that Jerry contributed during the month and the scanning/imaging equiment both have a useful life of 5 years with a $500 salvage value each. The company is using the straight line method for depreciating these assets. The company treats all assets contributed or purchased during the month as being placed in service on the first day of the month for depreciation purposes. (That means - total cost of equipment is $24,800, total salvage value is $1,000, useful life is 5 years.)

2. The vehicle that was contributed costs $28,000 and has a useful life of 5 years with a $2,000 salvage value. The company has decided to use the double declining balance method for depreciating these assets. The company treats all assets contributed or purchased during the month as being placed in service on the first day of the month for depreciation purposes. The cost of the equipment is on your unadjusted trial balance on the trial balance worksheet.

3. As of Oct 31, employees have not been paid for 3 days of work, totaling $500. The amounts will be paid on Nov 11.

4. The company provided tax preparation services during the month of Oct in the amount of $1,050 that was not already billed in October. The amount was collected in Nov.

5. On Nov 10, the company received a bill for office supplies which had been ordered and received in Oct in the amount of $412.00. Hint: Record this transaction in a T account before recording transaction required by f) below. These are new supplies and they have NOT been previously recorded.

6. Please prepare the journal entries required at month end (Oct 31) for the following events & transactions: You must show your calculations! It was determined that $785 of office supplies were still on hand on Oct 31.

7. Prepaid rent and prepaid insurance require adjustment to recognize the monthly expenses. (Remember that the current accountant - me - recorded the amounts paid for Oct & Nov rent and the a 1 year insurance policy as prepaid expenses on the date of payment.)

Answer 1