Principles of Accounting1 Page 7 VII. The Brown Company maintains four special j

Question

Principles of Accounting1 Page 7 VII. The Brown Company maintains four special journals: a single column Sales journal, a single column Purchases journal, a Cash receipts journal, a Cash payments journal and a general journal to record its transactions. Using the code below, indicate in the space provided the appropriate journal for recording the transactions listed. (10 points) Journals Sales Journal Cash Receipts Journal Cash Payments Journal Purchases Journal General Journal Code CR CP ear or Mr. Brown invested cash in the business. Purchased store supplies on account Sold merchandise to customer on account Purchased a 2 year fire insurance policy for cash. Received a check from a customer as payment on account 12 Paid for store supplies purchased in transaction 2, Purchased merchandise on account. Purchased office equipment for cash. Made an adjusting entry for store supplies used during the period. Issued a credit memorandum to a customer who returned defective merchandise previously sold on account. 2000 at a cost of $26,000. The truck is expected VIII. Dede Company acquires a delivery truck on Oct. 1 to have a salvage value of S?,000at the end of its 10-year useful life. (a) Compute the depreciation for 2000 and 2001 using the straight-line method. (b) What is the total accumulated depreciation at the end of 2001? (c) Find the Book value of the truck at the end of 2001. The company's fiscal year begins on January 1 and ends on December 31 (10 points) to

Explanation / Answer

VII.
1). CR
2). G
3). S
4). CP
5). CR
6). CP
7). P
8). CP
9). G
10). G

VIII.
Truck acquired on OCt 1 , 2000
Cost = $26000
Life 10 years
Salvage = $1000
Dep. method = SLM

Dep. for year 2000 = ($26000 - $1000) / 10 = $2500 / 12*3 = $625
Dep. for the year 2001 = $2500
Accumulated depreciation at the end of 2001 = $2500 +$625 = $3125
Book value of the truck at the end of 2001 = $26000 - $3125 = $22,875

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