19) A company purchased a delivery van for $23,000 with a salvage value of $3,000. It...
19)
A company purchased a delivery van for $23,000 with a salvage value of $3,000. It has an estimated life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize each year?
|
$5,000 |
||
|
$1,000 |
||
|
$4,000 |
||
|
$1,533 |
20)
A company sold $20,000 of equipment, accepting a 30-day note bearing interest at 12% per year (assume a 360 day year) for the $20,000. The entry to record the receipt of the amount collected at maturity will include which of the following, assuming no interest had been accrued.?
|
Credit interest revenue $200 |
||
|
Credit interest revenue $2,400 |
||
|
Credit Notes Receivable $20,200 |
||
|
Debit Cash for $20,000 |
Homework Answers
| 19) | Straight Line Depreciation = Purchase Price of Asset - Approximate salvage value/Estimated Useful Life of Asset | |||||||||
| Purchase Price of Asset | 23000 | |||||||||
| Approximate salvage value | 3000 | |||||||||
| Estimated Useful life of asset | 5 years | |||||||||
| Straight Line Depreciation = | 23000-3000/5 years | |||||||||
| = | 23000-3000 | |||||||||
| = | 20000 | |||||||||
| = | 20000/5 | |||||||||
| Depreciation Expenses = | 4000 | |||||||||
| Correct answer : Option C = 4000 | ||||||||||
| Debit | Credit | |||||||||
| 20) | Account Receivable | 20200 | ||||||||
| Notes Receivable | 20000 | |||||||||
| Interest Revenue | 200 | |||||||||
| (20000*12%*30/360 = 200) | ||||||||||
| Debit to Accounts receivable for 20200 | ||||||||||
| Credit to notes Receivable for 20200 | ||||||||||
| Debit to cash for 20200 | ||||||||||
| Correct answer : option C =credit notes receivable 20200 | ||||||||||
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