Question

Please check my completed assignment for errors. Please show calculations if possible, Thank you!

Record the following adjusting entries in general journal form as of December 31, 2020: 1. Supplies on hand at the end of the year: $700 2. Equipment shown on the 12/1 TB was purchased on 1/1/17, has a 8 year life, no salvage value and company uses double-declining balance method for its depreciation. 3. Included in the truck balance is a fully depreciated truck for $6,500 and a new truck valued at $50,000 which was purchased on 1/1/17. The new truck has a 9-year life, no salvage value and the company uses the sum-of-the-years digits for its depreciation method on this asset. 4. Don't forget to depreciate the new equipment! 5. The patent was purchased on 1/1/2013 for $100,000 and its useful life is 20 years. 6. $40,600 was paid on October 1, 2020 for six months rent. 7. On February 1, 2020, paid $38,500 for a 12-month insurance policy. 8. Declared dividends of $30,000 on December 31 9. The fair market value of the securities (classified as trading) is $17,000. 10.3% of Accounts Receivable is estimated to be uncollectible. Company uses the allowance method for estimating its uncollectible accounts. 11. Accrued salaries expense of $6,000 and recorded Payroll tax expense on account of $2300. 12. Had issued $300,000 of 6%, 10-year bond, dated 1/1/18 for $323,383 when the market rate was 5%. Interest is paid on June 30 and January 1 using the effective interest rate method. The June payment is included in the Dec. 1 TB. (Additional credit awarded if amortization table is included) 13. One month has passed since the issuance of restricted stock. 14. Interest on 30 days of note payable, dated 12/1/20 should be accrued. (Assume 360 days in a year for calculation) 15. Accrued interest of 7% on long-term note payable of $175,000. 16. Income tax rate is 21% Additional Information: During 2020, the following additional transactions occurred: (Hint: these are already included in 12/1/20 TB, but may be needed for the Statement of Cash Flows) 1. Issued 5,000 shares of common stock, $1 par, for $40,000 on June 1, 2020. 2. Some equipment was sold (original cost $10,000, book value $6,000) for $3,000 (do not consider in your #2 AJE above) 3. All amortization and depreciation is recorded once a year on December 31.

Answer 1

1. Supplies Entry is wrongly passed.

Correct Entry: Supplies Expenses A/c ...........Dr 700.00

To Supplies in Hand A/c 700.00

2. Depriciation Amount is wrongly calculated.

Equipment Value: Rs. 150000.00

Depreiciation for * Yers With no salvage value.

So, Depriciation = 150000/8=18750 as it is double declining method so total depriciation is $37500.

So Journal entry is:

Depriciation Expense A.c ...........Dr. 37500.00

To Accumulated Depriciation equipment A.c 37500.00

3.Depriciation Amount is wrong.

Depriciation is as follows:

(Remaining USeful Life/Sum of year of digits)*Depriciation base=(6/45)*50000=$6666.67

So, Journal Entry is:

Depriciation Expense A.c ...........Dr. 6666.67

To Accumulated Depriciation Truck A.c 6666.67

4. Entry is correctl passed.

5. Ammortisation expense is correctly passed.

6. Rent Expense is correctly passed.

7. Insurance entry is incorrect The correct entry is as follows:

Insurance Expense A/c ..........Dr 35292

Prepaid Insurance A/c..............Dr 3208

To Bank A/c 38500

8. Entry is correctly passed.

9. Entry is passed correctly.

10. Entry is wrong.

Correct entry is afollows:

Bad Debt Expense A/c ..................Dr 15755

To Allowances for Doubtful accounts A/c 15755

{ Total Doubtful Receivable= 788501*3%=23655

Already available balace:7900

Remaing Amount=23655-7900=15755

11. Entry is correctly passed.

12. Entry is incorrect. The correct Journal entry is

Iterest A/c.........Dr 15981.00

Premium on BonsA/c........Dr 2019

To Interest Payable A/c 18000.00

(Ammortisation Table Attached as image)

13. Entry is correctly passed.

14. Entry is correctly passed.

15. Entry is correctly passed.

16. Income Tax Entry is as follows:

Income Tax Expense A/c ..................Dr 51853

To Income Tax Payable A/c 51853.

tommortisation Table of Year 12 OP. Bal. In @ 6.1 32338518000 321562 18000 319630 18000 317611 18000 31542 18000 313267 18000 310930 18000 308 477 18000 303901 18000 303196. 18000 Int.@ Ile C.Bar. 16199 321112 16078 319630 19981 31761 15 881 315un. 15775 313267 13663 310930 1$$ 47 308477 15424 305901 15295 303106 14 804.(B/s) 300,000 6 8 16