Check out some similar questions!

nikhil7av · Apr 26, 2009, 02:31 PM

(1) Bridge Company keeps a small inventory of supplies used for cleaning and maintenance purposes. On January 1, 2008 the inventory of supplies on hand was $2,800. During the year, supplies purchased were debited to the supplies account in the amount of $13,500. On December 31, 2008, the inventory count of supplies in the storeroom was $1,750. Provide the journal entry to record the purchase of supplies during 2008. Provide the adjusting entry required on December 31, 2008.

(2) Mason Company has a machine that cost $71,000. The machine has an estimated useful life of five (5) years, no residual value, and was purchased on January 1, 2009. Mason uses the straight line method of depreciation. Provide the journal entry to record the depreciation expense for the year ended December 31, 2008. What is the annual depreciation expense if the machine residual value is $6,000?

pready · Apr 27, 2009, 05:11 PM

1. the journal entry is: Debit supplies for the amount purchased
Credit Cash for the amount of purchases.

The adjusting entry is:
Debit supplies expense for the amount of supplies used. This is cmputed as: onhand amount + purchases - ending inventory
Credit Supplies for the amount used.

2. the entry is: Debit Depreciation Expense for the amount of depreciation
Credit Accumulated Depreciation for the amount of depreciaiton

To calculate the amount of depreication using the straight line method you take the cost - the salvage value / useful life to ge the depreiation cost per year.