Depreciation Expense |Accumulated Depreciation | |Year 1 |$30‚000 |$30‚000 | |Year 2 | 30‚000 | 60‚000 | |Year 3 | 30‚000 | 90‚000 | Double Declining | |Annual Depreciation Expense
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pay-off Qantas’ decision to pay its debt earlier than scheduled is quite advantageous. The company can save money from paying monthly interest and free up cash flow from having to pay back loan every month – especially if the company has a lot of expenses to cover (Almeida‚ 2013). Moreover it also improves the company’s credit score – the use of historical data and statistical techniques to evaluate the credit risk of a potential applicant (Bridges‚ n.d.‚ p.2). With the improved credit score‚ Qantas
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A.PREPAID EXPENSES This is an expense that is already paid but not incurred. This is exactly the opposite of accrued expense. There are two methods or approaches that can be used in recording prepayments‚ namely: Expense Method and Asset Method. a. Expense Method- under this method or approach‚ an expense ................account is debited upon payment of the prepaid expense. ................This method is also called “nominal approach” because ................an expense is an Income Statement
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is made‚ this would cause a. expenses to be overstated. b. net income to be overstated. c. liabilities to be understated. d. revenues to be understated. 4. __C___ Lake of Fire Company purchased supplies costing $7‚000 and debited Supplies for the full amount. At the end of the accounting period‚ a physical count of supplies revealed $1‚900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be a. Debit Supplies Expense‚ $1‚900; Credit Supplies‚ $1‚900
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ACCT201/EXERCISE QUESTION 4/CH.3 Question DMD.‚ opened a dental clinic on August 1‚ 2007. The business transactions for August are shown below: |Aug 1 |Dr. Cravati invested $280‚000 cash in the business in exchange for 1‚000 shares of capital stock. | |Aug 1 |Rented an office and paid 3-month rent in advance‚ $2‚000 | |Aug 4 |Land and building were purchased for $400‚000. Of this amount‚ $60‚000
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Received $850 cash for services in April 16. Paid $400 cash for repair supplies purchased 2/9/11 February 28‚ 2011 * Office supplies on hand at month end- $150 * Rent expense for February – refer to transaction #2 above * Insurance expense for February – refer to transaction #3 above * Depreciation expense on vehicle for February – refer to transaction #12 * Repair supplies on hand - $80 *Acct. No. Assets 101 Cash 102 Accounts Receivable 103 Prepaid Rent 104 Prepaid Insurance
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following selected events and transactions occurred during April. April 1 Stockholders invested $40‚000 cash in the business in exchange for common stock. 4 Purchased land costing $30‚000 for cash. 8 Incurred advertising expense of $1‚800 on account. 11 Paid salaries to employee $1‚500. 12 Hired park manager at a salary of $4‚000 per month‚ effective May 1. 13 Paid $1‚500 cash for a one –year insurance policy. 17 Declared and paid a
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BYP 7-1 FINANCIAL REPORTING PROBLEM — A MINI PRACTICE SET (a) Sales Journal S1 Date Account Debited Invoice No. Ref. Accounts Receivable Dr. Sales Cr. Cost of Sales Dr. Inventory Cr. Purchases Journal P1 Date Account Credited Terms Ref. Inventory Dr. Accounts Payable Cr. Cash Receipts Journal CR1
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000 Extermination services revenue 60‚000 Interest revenue 872 Sales (of merchandise) 71‚026 Cost of goods sold 46‚300 Depreciation expense-Trucks - Depreciation expense-Equipment - Wages expense 35‚000 Interest expense - Rent expense 9‚000 Bad debts expense - Miscellaneous expense 1‚226 Repairs expense 8‚000 Utilities expense 6‚800 Warranty expense - Totals 226‚026 226‚026 The following information in a through h applies to the company at the end of the current year. a. The bank
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lunch expenses they occurred during lunch meeting at Good Eats Café on every work day as an ordinary and necessary business expense? No‚ Caro and Jerry cannot deduct the expenses they occurred during lunch as an ordinary and necessary business expense. Analysis 1 The lunch expenses paid to Good Eats Café are not deductible under § 162(a) as an ordinary and necessary expenses. Generally‚ based on Welch v. Helvering (S.Ct.‚ 1933) for an expenditure to be an ordinary and necessary business expense the
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