Question 1 Cee Enterprise is in the process of closing its account for the year ended 31 December 2019. Income statement column 159. Which of the following accounts has a normal debit balance?64. a debit to Insurance Expense and a credit to Accumulated Depreciation. Santa runs a large toy shop in Windsor. B) … Accounting for depreciation to date of disposal When selling or otherwise disposing of a plant asset, a firm must record the depreciation up to the date of sale or disposal. Each year when the accumulated depreciation journal entry is recorded, the accumulated depreciation account is increased. Accumulated Depreciation Equipment QUESTION 21 After the closing entries are journalized and posted, which of the following accounts would NOT have a balance? The accumulated depreciation account is an asset account that shows the amount of depreciation for the current year only. This … Accumulated Depreciation—Equipment $40 Notes Payable 5,000 Accounts Payable 2,500 Unearned Service Revenue 800 Salaries and Wages Payable 1,200 Interest Payable 50 Common Stock 10,000 Retained Earnings 2,360 $21,950 $21,950 • Harper prepares the post-closing … 5. Service Revenue b. All tools or machines undergo wear and tear over time. Income statement column 6. a. b. o During the closing process, revenue and expense accounts are cleared by debiting or crediting Income Summary for their amounts. Accumulated Depreciation is a Contra Asset Account. a debit to Prepaid Insurance and a credit to Accumulated Depreciation. Balance sheet column 3. $73,010 account? $0 During the closing B. . Accumulated Depreciation-Office Equipment: 70: If not adjusted: Assets = Liabilities + Capital + Revenue-Expense = Capital: Over: over: under: Over : Balance Sheet Presentation Office Equipment $8400. b. adding a column of figures. Which of the following groups of accounts will have zero balances after the closing process is completed? Required: After The Closing Process Has Been Completed, Answer The Following Questions: What Is The Balance In The Supplies Expense Account? Less-Accumulated Depreciation 70 $8330. What is the balance in the rent revenue account? Accumulated Depreciation 5. $48,800 What is the balance in the Capital account? a. preparing a chart of accounts. 20. Only permanent account balances should appear on the post-closing trial balance. Adjusted Trial Balance, Credit b. Services were performed to satisfy $800 of unearned service revenue. And this process will be carry on till the life of asset. They would then debit the $30,000 as accumulated depreciation and the $50,000 as cash. a. The equipment had an original cost of $40,000 and was 3/4 depreciated when sold. Balance sheet column 5. The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance … The process of preparing the post-closing trial balance is the same as you have done when preparing the unadjusted trial balance and adjusted trial balance. The equipment had an original cost of $50,000 and was 1/2 depreciated when sold. False. b. Powell Company had the following adjusted trial balance: Account Titles Credit Cash Debit $20.390 17.800 Accounts Receivable Supplies 7,690 44,900 Equipment $ 7,100 Accumulated Depreciation Accounts Payable Deferred Rent Revenue 4,000 1,950 36,630 21,900 Capital Stock Retained Earnings Dividends 16,000 Commission Revenue 50,400 5,200 Rent Revenue 6,100 Depreciation Expense … a. D) Unearned Rent . This entry will add the current year depreciation expense with the previous year closing balance. A) Depreciation Expense and Accumulated Depreciation?Equipment. The goal is to make the posted balance of the retained earnings account match what we reported on the statement of retained earnings and start the next period with a zero balance for all temporary accounts. By the end of the asset’s life, its cost has been fully depreciated and its net book value has been reduced to zero. At 12/31/07 the balance of the account was $270,000. Accumulated depreciation-equipment 54,250,000 Buildings 97,300,000 Equipment 150,250,000 Land 22,300,000 The company uses straight-line depreciation for buildings and equipment… True. False. Supplies Expense 1. One months worth … Balance sheet column 7. B. be closed to the capital account. Cash account C. Owner’s Capital account B. Depreciation C. Accretion B. 3. a. On the work sheet, Accumulated Depreciation, Equipment would be recorded in which of the following columns? reflects all depreciation to date. 63. Which one of the following accounts is both opened and closed during the closing process? Example #2. The accumulated depreciation account is a statement of financial position account and as the name suggests is cumulative, i.e. Income Statement, Debit c. Balance Sheet, Debit d. Income Statement, Credit This process is called depreciation. D. not be used. 31. It has the following information related to its non-current assets: Non-current assets Date acquired Cost Accumulated depreciation RM RM Machinery A 1 July 2016 25.000 9,375 Office equipment 1 April 2018 20,000 3,000 Depreciation on machineries is at the rate of 15% per annum on … Liquidation D. Hypothecation 6. a debit to Insurance Expense and a credit to Prepaid Insurance. The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance. 6.2. Company B is also selling its machine for $50,000, except they have not had it as long. C. be closed to the drawing account. Accumulated Depreciation is a real account/balance sheet account. 3. Accumulated depreciation is a contra asset account (an asset account with a credit balance) that adjusts the book value of the capital assets. Question: The President Of Price Company Has Asked You To Close The Books (prepare And Process The Closing Entries). Depreciation. The books are closed annually on December 31. Posting is the process of . The asset cost minus accumulated depreciation is known as the book value (or “net book value”) of the asset. Printing Plus has $100 of supplies expense, $75 of depreciation expense–equipment, $5,100 of salaries expense, and $300 of utility expense, each with a debit balance on the adjusted trial balance. 6. 4. 29. Accumulated Depreciation—Equipment : 14,000 Loss from Disposal of Plant Asset : 3,000 Equipment 45,000: To record the sale of equipment at a price less than book value. Accumulated depreciation-equipment at 1/1/07 was $230,000. a. a debit to Equipment for $500. C) Accumulated Depreciation. 14,700. True. False. During the closing process, Accumulated Depreciation, Equipment will A. be closed to the income summary account. You are to prepare the missing adjusting entry. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. c. The company has only one fixed asset (equipment) that it purchased at the start of this year. a. Presented below is the trial balance of the Crestwood Golf Club, Inc. as of December 31. Assuming the retailer uses the straight-line depreciation method, during each month of the display racks' lives the retailer's monthly income statement will report depreciation expense of $1,000. Income statement column 4. $0 During the closing process, what amount was transferred from the income summary account to the Capital account in the third closing entry (i.e., after revenue and expense accounts have been closed to Income Summary)? a debit to Accumulated Depreciation and a credit to Prepaid Insurance. 1,300. Unearned Fees 7. Answer A. Let us calculate the accumulated depreciation at the end of the financial year ended December 31, 2018, based on the following information: Gross Cost as on January 1, 2018: $1,000,000 The closing entry will credit Supplies Expense, Depreciation Expense–Equipment, Salaries Expense, and Utility Expense, and debit Income Summary. 62. You can generate several fixed asset accounts to accommodate equipment, machinery, land, and vehicles. Prepare closing entries and post. Chapter – 6 During the closing process, Accumulated Depreciation, Equipment will be closed to the drawing account. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: Accumulated Depreciation. The preparation of a post-closing trial balance serves as a check on the accuracy of the closing process and ensures that the books are in balance at the start of the new accounting period. Accumulated depreciation formula after 3 rd year = Acc depreciation at the start of year 3 + Depreciation during year 3 = $40,000 + $20,000 = $60,000. Accumulated depreciation -Truck Step 1: Determine what the current account balance equals. It has only accumulated $30,000 in depreciation. Depreciation on equipment for the month is $320. 30. Balance sheet column 2. $0 What Is The Balance In The Retained Earnings Account? c. transferring journal entries to ledger accounts. Only nominal accounts are closed. A. During 201X, one piece of equipment was sold. You need to monitor depreciation in your financial records as well. The correct sequence of steps in the accounting cycle is to prepare the A. At the end of the fiscal year, Accounts Receivable has a balance of $100,000 and Allowance for Doubtful Accounts has a balance of $7,000. In their books, they would record the $100,000 cost as a credit. Fees Earned. Allowance for doubtful accounts on 1/1/07 was $50,000. False. Accumulated Depreciation account D. Income Summary 7. Supplies 8. Accumulated depreciation is the cumulative depreciation of an asset up to a single point in its life. d. recording entries in a journal. A. Now there will be an adjusting entry if the depreciation expense is charges less or more from due to any reason. If the depreciation is previously charge less from the original, then the entry should be. Cash c. Accounts Payable d. Office Supplies QUESTION 22 After the accounts are closed and the journal entries have been posted, which of the following accounts would have a balance? The January 31 entry to record depreciation expense would include . 0 Step 2: Determine what the current account balance should equal. The accumulated depreciation account is closed to the income summary account. The closing entries are the journal entry form of the Statement of Retained Earnings. True. For example, at December 31, 20X2, the net book value of the truck is $50,000, consisting of $150,000 cost less $100,000 of accumulated depreciation. Recording asset depreciation in this way recognizes the use of assets in your business during the accounting period. The entry also increases Accumulated Depreciation, which is the use of the asset and appears on the balance sheet under the Vehicles asset line. During the audit of financial statements, auditors should make sure that the audit procedures that they prepare are addressing the risks of material misstatements that cause by depreciation expenses and other related items such as fixed assets. Depreciation Expense. During 2007, one piece of equipment was sold. b. The Vehicle asset line always shows the value of the asset at the time of purchase. Warton Company depreciates its equipment at the rate of $500 per month. 19. True. A. . 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