Question

QuesLIUI Wascana Ltd. is a small wholesaler of restaurant supplies. The company's post-closing trial balance at December 31, 2017, the end of its fiscal year, is presented Credit 26,250 WASCANA LTD. Post-Closing Trial Balance December 31, 2017 Debit Cash $82,000 Accounts receivable 525,000 Allowance for doubtful accounts Inventory 345,000 Equipment 1,800,000 Accumulated depreciation-equipment Accounts payable Interest payable Employee income tax payable CPP payable EI payable Provisions Unearned revenue Bank loan payable Common shares Retained earnings $2,752,000 480,000 316,000 3,000 56,000 30,000 13,000 37,000 12,000 900,000 61,000 817,750 $2,752,000

Answer 1

1	Bank loan payable	$              6,000
	Interest payable	$              3,000
	Cash		$              9,000
3	Prepaid insurance	$            26,400
	Cash		$            26,400
5	CPP payable	$            30,000
	EI payable	$            13,000
	Employee income tax payable	$            56,000
	Cash		$            99,000
6a.	Salaries	$        2,30,000
	Employee income tax payable		$            56,000
	CPP payable		$            15,000
	EI payable		$              4,324
	Cash		$        1,54,676
6b.	Salaries	$            21,054
	CPP payable		$            15,000
	EI payable		$              6,054
7	Income tax	$              8,000
	Cash		$              8,000
8a.	Accounts receivable	$        6,90,000
	Sales		$        6,90,000
	(To record sales)
8b.	Cost of goods sold	$        2,93,000
	inventory		$        2,93,000
	(To record cost of goods sold)
9	Cash	$        8,52,000
	Accounts receivable		$        8,52,000
10	Bad debts	$            14,000
	Accounts receivable		$            14,000
11	Bad debts (27000-26250)	$                  750
	Provision for doubtful debts		$                  750
12a.	Inventory	$        2,28,000
	Accounts payable		$        2,28,000
12b.	Administrative expenses	$            47,000
	Accounts payable		$            47,000
13	Accounts payable	$        3,55,000
	Cash		$        3,55,000
16	Dividend	$              4,000
	Cash		$              4,000

Adjusting entries:

2	Interest expense (894000*4%*1/12)	$              2,980
	Interest payable		$              2,980
3	Insuranc expense	$              2,200
	Prepaid insurance		$              2,200
4	Depreciation	$        5,28,000
	Accumulated depreication- Equipment		$        5,28,000
14	Administrative expense	$            20,000
	provisions		$            20,000
15a.	Unearned revenue	$              4,000
	Revenue		$              4,000
15a.	Cost of goods sold	$              1,000
	Inventory		$              1,000

Working:

Under double declining method accelerated depreciation provided which is two times straight-line method depreciation amount.

Useful life	5 years
SLM depreiication rate	=100/5
	=20%
Double declining depreciation rate	40%
Cost	1800000
Deprecation alreaady charged	480000
Book value	1320000
Deprecation (1320000*40%)	528000