[jsu4549m]

Do I record deprication in the following question

Purchased supplies at a cost of 14,000. Assume the above items have a 2 year life with no salvage value.

And also how do I record this

Invested 80,000 of your own money to start the business

[CaptainForest]

One typically does not record depreciation on supplies.

The biggest reason is that it usually is not material.

Also supplies usually don't last for a long time.


Investing 80,000 of your own money…
Dr. Cash 80,000
Cr. Equity/Donated Capital/Shares 80,000

[jsu4549m]

It actually said a printer and a scanner for the supplies

[CaptainForest]

Oh, well that could be qualified as Equipment then. Since when does a printer and scanner only last for 2 years?

In that case, assuming 14,000 is material to your company, I would depreciate it.

[jsu4549m]

How do you write that?

[CaptainForest]

When you but the Equipment for 14,000 the JE would be:
Dr. Equipment 14,000
Cr. Cash 14,000

After year 1 and after year 2, the JE is the same:
Dr. Depreciation Expense 7,000
Cr. Accumulated Depreciation 7,000

[jsu4549m]

THANK YOU!!

OK I have another question. How do you write the adjusted journal entry for
DR:cash 80000
CR:capital 80000

And also
DR:cash 6000
CR:revenue 6000

[CaptainForest]

THANK YOU!!!

ok i have another question. how do you write the adjusted journal entry for
DR:cash 80000
CR:capital 80000

and also
DR:cash 6000
CR:revenue 6000

Those 2 JE do not require any adjusting entries. The second one, the part dealing with Sales, that account has to be closed to Retained Earnings at the end of the year.

[jsu4549m]

OK I'm sooo sorry but I have another question

It says purchased 1,200 worth of supplies for cash

So DR: supplies and CR: cash

Then for my adjusting entry I DR:supplies and CR: supplies expense

I don't think that is right, let me know what you think

[CaptainForest]

ok im sooo sorry but i have another question

it says purchased 1,200 worth of supplies for cash

so DR: supplies and CR: cash

then for my adjusting entry i DR:supplies and CR: supplies expense

i dont think that is right, let me know what u think

You have the first JE correct.

The second one, you need to reverse it. Debit Supplies Expense and Credit Supplies.

[jsu4549m]

OK one more I have DR:cash CR:AR for my JE

And DR:AR CR:revenue for my adjusting entry is that right

[CaptainForest]

ok one more i have DR:cash CR:AR for my JE

and DR:AR CR:revenue for my adjusting entry is that right

I don't follow this.

What was the transaction all about?

[jsu4549m]

It said... collected 8,000 from the client billed earlier, which said provided services for a client. Sent him a bill for 15,000

[CaptainForest]

Ok, so when you send the bill to the customer:
Dr. AR 15,000
Cr. Sales 15,000

When you received the cash…
Dr. Cash 8,000
Cr. AR 8,000

[jsu4549m]

OK I got that but how do you do an adjusting entry for the DR:cash 8000 CR:AR 8000

[CaptainForest]

What do you mean?

[krystal1973]

80000.00 is owners equity.

[jsu4549m]

Don't you have to do an adjusting entry if it's a cash entry

[CaptainForest]

No.

The "adjustment" would be you get cash, and you draw down the AR you set up with the sale.

[jsu4549m]

OK I can't get this, I'm supposed to make adjusting entries to these things if needed and she said there was 11

DR:cash 80000
CR:capital 80000

DR:cash 30000 this was borrowed 30000 from bank by sugning a 6 month 10% note
CR:NP 30000

DR:Prepaid rent 6000
CR:cash 6000

DR:prepaid ins. 2400
CR:cash 2400

DR:Equipment 14000 this one had 2 year life
CR:cash 14000

DR:equipment 5000 this one had 5 year life
CR:cash 5000

DR:advertising exp 6000
CR:cash 6000

DR:supplies 2000
CR:AP 2000

DR:cash 6000
CR:revenue 6000

DR:AR 15000
CR:revenue 15000

DR:salary exp 1500
CR:cash 1500

DR:supplies 1200
CR:cash 1200

DR:cash 8000
CR: 8000

DR:AP 2000
CR:cash 2000

DR:cash 20000
CR:unearned rev 20000