A company established a petty cash fund of $100 on September 1. On September 10,
ID: 2359628 • Letter: A
Question
A company established a petty cash fund of $100 on September 1. On September 10, the petty cash fund was replenished when there was $16 remaining and there were petty cash receipts for: office supplies, $27; transportation-in on inventory purchased, $32; and postage, $22. On September 15, the petty cash fund was increased to $125 in total. Record the above transactions in general journal form.On May 31, a company had a balance in its accounts receivable of $103,895. Prepare the company's following transactions for June.
june 2 sold merchandise on account $14,000
june 8 sold $15,000 worth of accounts receivable to first bank. first bank charged a 3% factoring fee.
june 20 borrowed $30,000 cash from first bank, pledging $31,500 worth of accounts receivable as collateral for the loan.
On April 1, 2007, SAS Corp. purchased and placed in service a plant asset. The following information is available regarding the plant asset:
Acquisition Cost................................................ $130,000
Estimated Salvage Value.................................. $15,000
Estimated Useful Life........................................ 5 years
Make the necessary adjusting journal entries at December 31, 2007, and December 31, 2008 to record depreciation for each year under the following depreciation methods:
(a.) Straight-line.
(b.) Double-declining-balance.
Explanation / Answer
A company established a petty cash fund of $100 on September 1. On September 10, the petty cash fund was replenished when there was $16 remaining and there were petty cash receipts for: office supplies, $27; transportation-in on inventory purchased, $32; and postage, $22. On September 15, the petty cash fund was increased to $125 in total. Record the above transactions in general journal form.
September 1
Debit: Petty Cash 100
Credit: Cash 100
September 10
Debit: Office supplies expense 27
Debit: Merchandise Inventory 32
Debit: Miscellaneous Expense 22
Debit: Cash over and short 3
Credit: Cash 84
September 15
Debit: Petty Cash 25
Credit: Cash 25
On May 31, a company had a balance in its accounts receivable of $103,895. Prepare the company's following transactions for June.
june 2 sold merchandise on account $14,000
june 8 sold $15,000 worth of accounts receivable to first bank. first bank charged a 3% factoring fee.
june 20 borrowed $30,000 cash from first bank, pledging $31,500 worth of accounts receivable as collateral for the loan.
June 2
Debit: Accounts Receivable 14,000
Credit: Sales Revenue 14,000
June 8
Debit: Cash 14,550
Debit: Factoring Fee Expense 450
Credit: Accounts Receivable 15,000
June 20
Debit: Cash 30,000
Credit: Notes Payable 30,000
(Note: The amount of accounts receivable pledged will not be entered into the accounting records as a journal entry; however, it will be disclosed in the financial statements that 31,500 of accounts receivable are pledged as security for a 30,000 note payable.)
On April 1, 2007, SAS Corp. purchased and placed in service a plant asset. The following information is available regarding the plant asset:
Acquisition Cost................................................ $130,000
Estimated Salvage Value.................................. $15,000
Estimated Useful Life........................................ 5 years
Make the necessary adjusting journal entries at December 31, 2007, and December 31, 2008 to record depreciation for each year under the following depreciation methods:
(a.) Straight-line.
(130,000 – 15,000)/5 = 23,000 per year
For 2007, only recognize 9 months from April to December: (9/12)*23,000 = 17,250
December 31, 2007 entry:
Debit: Depreciation Expense 17,250
Credit: Accumulated Depreciation 17,250
December 31, 2008 entry:
Debit: Depreciation Expense 23,000
Credit: Accumulated Depreciation 23,000
(b.) Double-declining-balance.
Since the asset’s life is 5 years, 100%/5 = 20% is the straight line rate, double declining balance using double the straight line rate, which is 2*20% = 40%.
Apply the rate, 40%, to the book value, 130,000:
130,000*40% = 52,000
Only recognize 9 months’ depreciation for the first year, April to December:
52,000*9/12 = 39,000
December 31, 2007 journal entry:
Debit: Depreciation Expense 39,000
Credit: Accumulated Depreciation 39,000
For 2008, the new book value is 130,000 – 39,000 = 91,000.
Apply the rate, 40%, to the current book value, 91,000:
91,000*40% = 36,400
December 31, 2008 journal entry:
Debit: Depreciation Expense 36,400
Credit: Accumulated Depreciation 36,400
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