nstructor-created question Question Hep King Appliance Center Nantucket has just

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nstructor-created question Question Hep King Appliance Center Nantucket has just purchased a franchise from King Appliance Center (KAC) (Click the icon to view the additional information.) Following is the chart of accounts for King Appliance Center Nantucket. As a new business, all beginning balances are $O. (Click the ioon to view the chart of accounts.) Requirement 3. In preparation for preparing the adjusting entries, complete depreciation schedules forthfive yars for the depreciable plant assets, assuming the asses were purchased on January 2, 2018: a. Building, straight-line, 30 years, $25,000 residual value. (Click the icon to view the Tacount balancos from Requirement 3) BUILDING: Straight-Line Depreciation Schedule Depreciation for the Year Asset Depreciable Depreciation Depreciation Aecumulated Book Cost Date Cost Rate Expense Depreciation Value 1/1/2018 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Choose from any list or enter any number in the input fields and then click Check Answer

Explanation / Answer

Req 3 Cost Of building 685000 Salvage value 25000 Depreciable cost 660000 Life 30 yrs Annual Depreciation (660,000/30 = $ 22,000 Rate of Dep = 22,000 /660,000 *100= 3.33% Date Assets cost Depreciable cost Dep rate Dep Expense Acc. Dep Book value 1/1/2018 685000 685000 12/31/2018 660000 3.33% 22000 22000 663000 12/31/2019 660000 3.33% 22000 44000 641000 12/31/2020 660000 3.33% 22000 66000 619000 12/31/2021 660000 3.33% 22000 88000 597000 12/31/2022 660000 3.33% 22000 110000 575000 Cost of stoe fixtures    67500 Salvage value                   0 Deprciable cost 67500 Estimated Life 15yrs Annualdep(67500/15)   = $4500 Rate of dep (4500/67500*100) = 6.67% Date Assets cost Depreciable cost Dep rate Dep Expense Acc. Dep Book value 1/1/2018 67500 67500 12/31/2018 67500 6.67% 4500 4500 63000 12/31/2019 67500 6.67% 4500 9000 58500 12/31/2020 67500 6.67% 4500 13500 54000 12/31/2021 67500 6.67% 4500 18000 49500 12/31/2022 67500 6.67% 4500 22500 45000 Cost of office equipment   $40,000 Salvage value                           $2500 Depreciable cost 37500 Life 5 yrs Annual depreciation ( 37500/5) $ 7500 Rate of dep (7500/37500*100) = 20% Date Assets cost Book Value DOB RATE Dep Expense Acc. Dep Book value 1/1/2018 40000 40000 12/31/2018 40000 40.00% 16000 16000 24000 12/31/2019 24000 40.00% 9600 25600 14400 12/31/2020 14400 40.00% 5760 31360 8640 12/31/2021 8640 40.00% 3456 34816 5184 12/31/2022 5184 40.00% 2684 37500 2500 (B/F) Req4: A. Insurance expense Dr. 2600 Prepaid Insurance cr. 2600 B. Bad debts expense Dr. 8800 Allowance for doubtful debts Cr. 8800 (220,000 *4%) C. Supplies Expense Dr. 1063 Office supplies Cr. 1063 D. Interest Recievable Dr. Interest revenue Cr. (here rate of interest not given. The amount to be compuetd by $ 210,000*3/12*Rate of Int) E. Depreciation expense-Building Dr. 22000 Depreciation Expense-Store fixture 4500 Depreciation expense-Office Equip Dr. 16000 Accumulated Dep-Building Cr. 22000 Accumulated Dep- Store fixture 4500 Accumualted Dep- Office equip Cr. 16000 F. Amortization expense-Franchise Dr. 4700 Franchise Cr. 4700 G Interest Expense Dr. Interest Payable Cr. (Here also rate of it no given)

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