Here is the sceneraio:


THe following information was collected to be used in adjusting entries prior to preparing financial statements for the company's first three months

A) The December 31st inventory of computer supplies was $1,440
B)Three months have passed since the annual insrance premium was paid
C)As of the end of the year, Carly Smith has not been paid for four days of work at the rate of $200 per day
D) The computer is expected to have a four-year life with no residual value
E) The office equipment is expected to have a three year life with no residual value
F) Prepaid rent for three of the four months has expired


Please Help! I have no idea how to get the numbers.

Quote:

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Originally Posted by missreba06

Here is the sceneraio:


THe following information was collected to be used in adjusting entries prior to preparing financial statements for teh company's first three months

A) The December 31st inventory of computer supplies was $1,440
B)Three months have passed since the annual insrance premium was paid
C)As of the end of the year, Carly Smith has not been paid for four days of work at the rate of $200 per day
D) The computer is expected to have a four-year life with no residual value
E) The office equipment is expected to have a three year life with no residual value
F) Prepaid rent for three of the four months has expired


Please Help!! I have no idea how to get the numbers.

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a. journal entry is credit to Office supplies of $1440 and debit to Inventory
b. JE is credit AP by the amount that was due 12/31 and Debit Insurance expense
c. Credit Salaries payable and debit Salaries at the amount of $800
d. book depreciation. Use straightline method. If computer has 4 year life, it is 48 month life. When was computer purchased. Accumulated depreciation is the cost of the computer, divided by 48 and multiplied by the number of months in service
e. same as d, except 36 months
f. JE to reverse the rent payments booked to prepaid and charge to rent.

The computer was purchased in October of the same year for 36 000.00

36000./48 months x 3 months in service = depreciation amount
Then you book a credit of $2250 to accumulated depreciation and $2250 to depreciation expense.