Determining Financial StatementEffects of Three AdjustingEntries
Terbish Company started operations on January 1, 2012. It is now December 31, 2012, the end of the annual accounting period. The part-time bookkeeper need s your help to analyze the following three transactions:
a. During 2012, the company purchased office supplies that cost $1.600. At the end of 2012, office supplies of $400 remained on hand .
b.On January 1, 2012, the company purchased a special machine for cash at a cost of $12.000. The machine’s cost is estimated to depreciate at $1,200 per year.
c. On July 1. 2012, the company paid cash of $600 for a two-year premium on an insurance policy on the machine: cove rage begins on July 1. 2012.
Required:
Complete the following schedule with the amounts that should be reported for 2012:
Selected Balance Sheet Accounts at December 31,2012 | Amount to Be Reported |
Assets | $- |
Equipment | - |
Accumulated depreciation | - |
Net book value of equipment | - |
Office supplies | - |
Prepaid insurance | - |
Selected Income Statement Accounts for the Year Ended December 31, 2012 | |
Expenses | $- |
Depreciation expense | - |
Office supplies expense | - |
Insurance expense | - |
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