Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For each of the following situations, analyze the accounting change and provide the necessary journal entry (if any) as set out in the REQUIRED below.

image text in transcribedimage text in transcribed

For each of the following situations, analyze the accounting change and provide the necessary journal entry (if any) as set out in the REQUIRED below. (a) A used truck that was purchased for $20,000 in on January 1, 2017 was recorded on the date purchased with a debit to transportation expense and a credit to cash. The company uses straight-line depreciation with an estimated 10% residual value for vehicles. (b) A piece of equipment was purchased on July 1, 2018 for $80,000 with an estimated useful life of 10 years and residual value of $20,000. In 2020, it was determined that the estimated useful life of the company's equipment was reduced from ten years to five years from the date of purchase, and the estimated residual value for the equipment was reduced to $5,000. Depreciation of $6,000 has been recorded for this equipment in 2020. (c) The company's accounting clerk used double declining balance in fiscal 2019 for an intangible asset acquired on January 1, 2019 for $50,000 with an expected useful life of 10 years and a residual value of $10,000. During 2020 it was determined that the pattern of benefits was more evenly distributed annually, so the company adopted the policy of using the straight-line method of amortization. No depreciation has been recorded for this intangible asset in 2020. ning of fiscal 2020, the company paid at total of $20,000 to 50 Lunges that had been earned in fiscal 2019 but not bin 2020. it was recorded with a debit to from ten years to five years from the date or purchase, alu Le value for the equipment was reduced to $5,000. Depreciation of $6,000 has been recorded for this equipment in 2020. 3 6 (c) The company's accounting clerk used double declining balance in fiscal 2019 for an intangible asset acquired on January 1, 2019 for $50,000 with an expected useful life of 10 years and a residual value of $10,000. During 2020 it was determined that the pattern of benefits was more evenly distributed annually , so the company adopted the policy of using the straight-line method of amortization. No depreciation has been recorded for this intangible asset in 2020. (d) At the beginning of fiscal 2020, the company paid at total of $20,000 to 50 employees for four days of wages that had been earned in fiscal 2019 but not recorded. When the payment was made in 2020, it was recorded with a debit to wages expense and a credit to cash. Question 9 (13 points) Assuming that the company's books have not yet been closed for 2020, prepare any journal entries that are required for each of the transactions. Ignore income tax considerations

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Non-Accountants

Authors: David Horner

10th Edition

0749472812, 978-0749472818

More Books

Students also viewed these Accounting questions