Adjusting Entries QS 3-7Preparing adjusting entries (annual)depreciation LO4 bec. 31, 2017 Jan. 1, 2017 May Nov Mar. July Sept. Jan oct QS 3-1GAAP and adjusting entries LO2 For each of the following, identify the primary GAAP that has been violated and explain why. Feb. Apr. June Aug. Dec. 2017 Equipment will last five years (2017-2021) Delta Company prepared its first set of financial statements for the three years ended July 31, 2017. On January 1, 2017, Taco Taqueria, a Mexican restaurant, purchased equipment for $12,000 cash. Taco Taqueria estimates that the equipment will last five years (useful life). The restaurant expects to sell the equipment for $2,000 at the end of five years. Taco Taqueria prepares financial statements on an annual basis and has a December 31 year-end. a Record the journal entry on January 1, 2017 b. What is the formula to calculate straight-line depreciation? Page 189. 2. Warren Consulting purchased $9,800 of supplies on September 30, 2017, and debited Office Supplies Expense. Warren's year-end is September 30. 3. On May 3, 2017, Nikos Car Wash collected $3,000 in advance from a new limousine company to begin operating June 1, 2017. Nikos credited a revenue account for the $3,000 On November 15, 2017, Scooter Town rented equipment for $1,500. Scooter Town is not recording the transaction until it pays (payment is required 15 days from the rental date) Page 191 c Using the straight-line depreciation method, calculate the annual depreciation for 2017 (Jan. 1 to Dec. 31 2017). In order to prepare the annual financial statements, record the adjusting journal entry for depreciation on December 31, 2017 QS 3-2Accrual accounting LO3 Based on the accrual basis of accounting, determine when the following independent companies should recognize revenue. + QS 3-8Preparing adjusting entries (annual)-depreciation expense L04 Gold Co. purchased a vehicle on March 1, 2017, for cash of $32,000. It will be used by the president for business purposes for four years and then sold for an estimated amount of $8,000. Gold Co.'s year-end is December 31. a. Record the journal entry on March 1, 2017. b. Using the straight-line depreciation method, calculate the depreciation expense for March 1, 2017 to December 31, 2017, c To prepare the 2017 annual financial statements, record the adjusting entry for December, 31, Starbucks sells you a $25 gift card for your friend's birthday in February. Your friend spends the gift card on coffee and baked goods in March. 2. You paid your university tuition in September for the Fall semester that runs from September to December. QS 3-6Preparing adjusting entries (annual)-prepaid expense LO4 Kiss the Chef Co., a cooking school, purchased a two-year insurance policy on April 1, 2017, paying cash of $7,680. Its year-end is December 31. a. Record the journal entry on April 1, 2017 b. How many months are between April 1, 2017 and December 31, 2017? Record the adjusting entry on December 31, 2017. c. How many months are between January 1, 2018 and December 31, 2018? Record the adjusting entry on December 31, 2018. 2017 d. Using the straight-line depreciation method, calculate the depreciation expense for January 1, 2018 to December 31, 2018. To prepare the 2018 annual financial statements, record the adjusting entry for December, 31, How many months of the insurance policy are left in 2019 Adjusting Entries QS 3-7Preparing adjusting entries (annual)depreciation LO4 bec. 31, 2017 Jan. 1, 2017 May Nov Mar. July Sept. Jan oct QS 3-1GAAP and adjusting entries LO2 For each of the following, identify the primary GAAP that has been violated and explain why. Feb. Apr. June Aug. Dec. 2017 Equipment will last five years (2017-2021) Delta Company prepared its first set of financial statements for the three years ended July 31, 2017. On January 1, 2017, Taco Taqueria, a Mexican restaurant, purchased equipment for $12,000 cash. Taco Taqueria estimates that the equipment will last five years (useful life). The restaurant expects to sell the equipment for $2,000 at the end of five years. Taco Taqueria prepares financial statements on an annual basis and has a December 31 year-end. a Record the journal entry on January 1, 2017 b. What is the formula to calculate straight-line depreciation? Page 189. 2. Warren Consulting purchased $9,800 of supplies on September 30, 2017, and debited Office Supplies Expense. Warren's year-end is September 30. 3. On May 3, 2017, Nikos Car Wash collected $3,000 in advance from a new limousine company to begin operating June 1, 2017. Nikos credited a revenue account for the $3,000 On November 15, 2017, Scooter Town rented equipment for $1,500. Scooter Town is not recording the transaction until it pays (payment is required 15 days from the rental date) Page 191 c Using the straight-line depreciation method, calculate the annual depreciation for 2017 (Jan. 1 to Dec. 31 2017). In order to prepare the annual financial statements, record the adjusting journal entry for depreciation on December 31, 2017 QS 3-2Accrual accounting LO3 Based on the accrual basis of accounting, determine when the following independent companies should recognize revenue. + QS 3-8Preparing adjusting entries (annual)-depreciation expense L04 Gold Co. purchased a vehicle on March 1, 2017, for cash of $32,000. It will be used by the president for business purposes for four years and then sold for an estimated amount of $8,000. Gold Co.'s year-end is December 31. a. Record the journal entry on March 1, 2017. b. Using the straight-line depreciation method, calculate the depreciation expense for March 1, 2017 to December 31, 2017, c To prepare the 2017 annual financial statements, record the adjusting entry for December, 31, Starbucks sells you a $25 gift card for your friend's birthday in February. Your friend spends the gift card on coffee and baked goods in March. 2. You paid your university tuition in September for the Fall semester that runs from September to December. QS 3-6Preparing adjusting entries (annual)-prepaid expense LO4 Kiss the Chef Co., a cooking school, purchased a two-year insurance policy on April 1, 2017, paying cash of $7,680. Its year-end is December 31. a. Record the journal entry on April 1, 2017 b. How many months are between April 1, 2017 and December 31, 2017? Record the adjusting entry on December 31, 2017. c. How many months are between January 1, 2018 and December 31, 2018? Record the adjusting entry on December 31, 2018. 2017 d. Using the straight-line depreciation method, calculate the depreciation expense for January 1, 2018 to December 31, 2018. To prepare the 2018 annual financial statements, record the adjusting entry for December, 31, How many months of the insurance policy are left in 2019