Question

Beaver Construction purchases new equipment for $34,800 cash on April 1, 2021. At the time of purchase, the equipment is expected to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 60 months ($580/month).

Required:

1. 1.&2. Record the necessary entries in the Journal Entry Worksheet below.

2. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2021 is $0).
   

At the beginning of May, Golden Gopher Company reports a balance in Supplies of $470. On May 15, Golden Gopher purchases an additional $3,000 of supplies for cash. By the end of May, only $270 of supplies remains.

Required:

1. 1.&2. Record the necessary entries in the Journal Entry Worksheet below.

2. 3. Calculate the balances after adjustment on May 31 of Supplies and Supplies Expense.

Answer 1

Part 1

Journal

Date	Account title	Debit	Credit
April 1, 2021	Equipment	$34,800
	Cash		$34,800
	(To record purchase of equipment)
Dec. 31, 2021	Depreciation Expense	$5,220
	Accumulated Depreciation		$5,220
	(To record depreciation expense)

Depreciation expense for year 2021 = Monthly depreciation x 9

= 580 x 9

= $5,220

Year-end adjusted balances of Accumulated Depreciation = $5,220

Year-end adjusted balances of Depreciation Expense = $5,220

Part 2

Journal

Date	Account title	Debit	Credit
May 15	Supplies	$3,000
	Cash		$3,000
	(To record purchase of supplies)
May 31	Supplies expense	$3,200
	Supplies		$3,200
	(To record supplies expense)

Supplies expense = Beginning supplies + Supplies purchased - Ending supplies

= 470 + 3,000 - 270

= $3,200

Supplies balance on May 31 = $270

Supplies expense balance on May 31 = $3,200

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