Question

. Ouest technology Ltd faced the following situations. When the business collected $8,000 in advance three months ago, the accountant debited Cash and credited Unearned Revenue. The client was paying for two test machines, one delivered in December, the other to be delivered in April 2020. Salary expense is $320 per day to you (please add your name as memo to the entry when you do it. Deduct 5 marks without name)- Monday through Friday - and the business pays employees each Friday. For example, purposes, assume that this year, December 31 falls on a Tuesday. The unadjusted balance of the Supplies account is $1,100. The total cost of supplies on hand is $800. Equipment was purchased at the beginning of this year at a cost of $24,000. The equipment's useful life is six years and no residual value. Record the depreciation for this year using straight line method. . Journalize the adjusting entry needed at 2019 year-end (December 31, 2019) for each situation. Each scenario should be considered independently. Please explain your adjusting entries. Entries without explanation reduce 30% marks. Good luck.

Answer 1

Answer:

Date Account Title Debit Credit Unearned 31-Dec Revenue $ 4,000 Sales $ 4,000 (To record revenue earned for machine delivered in December) The advance was for two test machines, out of which one machine has been delivered. Hence, revenue to the extent of one machine which amounts to $4,000 will be recognized. Salary Expense 31-Dec ($320 X 2) $ 640 Salary Payable $ 640 (To record accrued salary for two days for Your Name XX) Salary needs to be accrued for two days - Mon & Tues. Salary is accrued by recording and debiting the salary expense and showing it as salary payable

Date Account Title Debit Credit Supplies 31-Dec Expense $ 300 Supplies $ 300 (To record consumption of supplies) Supplies Expense = Balance of Supplies Account - Physical count of Supplies Supplies Expense = $1,100 - $800 Supplies Expense = $300 Expense is recorded by debiting the supplies expense account. The supplies used will credit the supplies account to that extent. Depreciation 31-Dec Expense $ 4,000 Accumulated Depreciation - Equipment $ 4,000 (To record depreciation for the year) Depreciation with Straight Line Method: Depreciation for the year = (Cost - Salvage Value)/Useful Life Depreciation for the year = (24,000 - 0/6 Depreciation for the year = $ 4,000