Solution-Expected useful life of three years and no salvage

Expected useful life of three years and no salvage value

Reference no: EM131770607

Kristi Williams offers family counseling services specializing in financial and marital problems. Kristi Williams Family Counseling Services UNADJUSTED TRIAL BALANCE December 31, 20--

1	Cash	8,730.00
2	Office Supplies	700.00
3	Prepaid Insurance	600.00
4	Office Equipment	18,000.00
5	Computer Equipment	6,000.00
6	Notes Payable		8,000.00
7	Accounts Payable		500.00
8	Kristi Williams, Capital		11,400.00
9	Kristi Williams, Drawing	3,000.00
10	Client Fees		35,800.00
11	Wages Expense	9,500.00
12	Rent Expense	6,000.00
13	Utilities Expense	2,170.00
14	Miscellaneous Expense	1,000.00
15	Totals	55,700.00	55,700.00

Information for year-end adjustments is as follows:

(a) Office supplies on hand at year-end amounted to $100.

(b) On January 1, 20--, Williams purchased office equipment that cost $18,000. It has an expected useful life of 10 years and no salvage value.

(c) On July 1, 20--, Williams purchased computer equipment costing $6,000. It has an expected useful life of three years and no salvage value. Assume that Williams computes depreciation to the nearest full month.

(d) On December 1, 20--, Williams paid a premium of $600 for a six-month insurance policy.

Required:

1.	Prepare the work sheet for the year ended December 31, 20--.
2.	Prepare adjusting entries in a general journal.

CHART OF ACCOUNTS

Kristi Williams

General Ledger

ASSETS
101	Cash
142	Office Supplies
145	Prepaid Insurance
181	Office Equipment
181.1	Accumulated Depreciation-Office Equipment
187	Computer Equipment
187.1	Accumulated Depreciation-Computer Equipment

LIABILITIES
201	Notes Payable
202	Accounts Payable

EQUITY
311	Kristi Williams, Capital
312	Kristi Williams, Drawing

REVENUE
401	Client Fees

EXPENSES
511	Wages Expense
521	Rent Expense
523	Office Supplies Expense
533	Utilities Expense
535	Insurance Expense
541	Depreciation Expense-Office Equipment
542	Depreciation Expense-Computer Equipment
549	Miscellaneous Expense

Reference no: EM131770607

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Expected useful life of three years and no salvage value

Reference no: EM131770607

Reference no: EM131770607

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