Hi, I have some balance day adjustments that I need to record, wondering if some of you could help me?

1. An apprentice is paid $200 a week. He is owed two weeks wages.

2. The business has use of a motor vehicle purchased 1 January 2010, at a cost of $32,000. It has an expected life of 4 years and an estimate trade-in value of $4000. Straight-line depreciation is used.

3. Supplies on hand 1 January 2012 were valued at $300, and supplies on hand 30 June were 2012 were valued at $550.



with question 1, is this the right entry?:
Wages expenses Dt
Wages payable Cr

Question 2, (32,000-4,000) / 4 years = $7,000 Per Annum. According to straight line depreciation. What I don't know is, does the date have anything to do with it? And how do I record this transaction?


Question 3, Is this the right entry?:
Supplies expenses Dt
Supplies Cr


I'm pretty sure I have questions 1 and 3 correct, just need you guys to verify it for me, but I really have a problem when it comes to depreciation, can someone please help?

essentially you are correct. The Supplies carried forward are a prepaid expense you have not indicated the value of the entry

From the detail you have provided, 30 June is the balance date so your first year's depreciation will be for six months. When you say the business has use of a motor vehicle. This implies that they do not own it.

Quote:

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Originally Posted by paraclete

essentially you are correct. The Supplies carried forward are a prepaid expense you have not indicated the value of the entry

From the detail you have provided, 30 June is the balance date so your first year's depreciation will be for six months. When you say the business has use of a motor vehicle. this implies that they do not own it.

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I see, so... is this correct?


Wages expenses Dt $400
Wages payable Cr $400

Supplies expenses Dt $550
Supplies Cr $550


With the depreciation one, the information states that the vehicle was purchased on 1 January 2010, does that not indicate that they own the asset?

Quote:

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Originally Posted by AdanChin

I see, so...is this correct?


Wages expenses Dt $400
Wages payable Cr $400

Supplies expenses Dt $550
Supplies Cr $550


with the depreciation one, the information states that the vehicle was purchased on 1 january 2010, does that not indicate that they own the asset?

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you can assume they own it but you did not say that, in accounting precision is important. You did not state that the business purchased the vehicle but that they had the use of it. This could also imply they lease the vehicle for an unspecified amount.
Debit depreciation Credit provision for depreciation

as to the prepayment this is an adjusting entry so you have the value incorrect; the amount is $250

Quote:

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Originally Posted by paraclete

you can assume they own it but you did not say that, in accounting precision is important. You did not state that the business purchased the vehicle but that they had the use of it. This could also imply they lease the vehicle for an unspecified amount.
Debit depreciation Credit provision for depreciation

as to the prepayment this is an adjusting entry so you have the value incorrect; the amount is $250

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I see, thanks a lot for your help :)