For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month's depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental rental of hospital beds. At the end of the current period, one month has passed. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Transaction Assets Liabilities + Equity Revenues Expenses = Net Income a. To record depreciation. b. To record utilities. c. To record rent. d. To record revenue.

For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month's depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental rental of hospital beds. At the end of the current period, one month has passed. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Transaction Assets Liabilities + Equity Revenues Expenses = Net Income a. To record depreciation. b. To record utilities. c. To record rent. d. To record revenue.

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Description: For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template:a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years.One-

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 9SPA: CALCULATING AND JOURNALIZING DEPRECIATION Equipment records for Johnson Machine Co. for the year...

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Calculating and Journalizing Depreciation Equipment records for Johnson Machine Co. for the year follow. Johnson Machine uses the straight-line method of depreciation. In the case of assets acquired by the fifteenth day of the month, depreciation should be computed for the entire month. In the case of assets acquired after the fifteenth day of the month, no depreciation should be considered for the month in which the asset was acquired. Purchase Salvage Date Asset Price Useful Life Value Purchased 8 years January 1 Truck #1 $20,000 $4,000 Truck #2 24,000 8 4,000 April 10 Tractor #1 18,000 3,000 Мay 1 Tractor #2 14,000 6 2,000 June 18 Forklift 40,000 10 4,000 September 1 Required: 1. Calculate the depreciation expense for Johnson Machine as of December 31, 20- 116,000 x Feedback 2. Prepare the entry for depreciation expense using a general journal. Page: 1 DOC. POST. NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT 20-- Dec. 31 2 3
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Instructions Bailand Company purchased a building for $218,000 that had an estimated residual value of $8,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years' life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years'-digits method. 3. Bailand discovers that the estimated residual value has been ignored in the computation of depreciation expense. Required: For each of the independent situations, prepare all the journal entries relating the building for the fifth year. Ignore income taxes.