How depreciation is calculated on a monthly basis

Assignment Help Accounting Basics
Reference no: EM131751250

Now that you have completed the June bank reconciliation process, you are asked to complete the worksheet for Hi-Fi Way.

The worksheet is an internal document that exists outside the journals and ledgers. It is often used in the manual accounting system to help record adjusting entries and prepare financial statements. After you have prepared the worksheet, in the next section of the practice set you will be asked to use the completed worksheet to help journalize and post adjusting entries to general ledger. You will also use this worksheet to assist you in preparing the financial statements for Hi-Fi Way in a later section of this practice set.

The details of the end of month adjustments for June are as follows:

Office Furniture owned by the business: original purchase price was $8,000, estimated useful life was 4 years, and estimated residual value was $1,500 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.

Office Equipment owned by the business: original purchase price was $49,000, estimated useful life was 11 years, and estimated residual value was $5,500 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.

The water usage for the month of June is estimated to be $120.

The estimated electricity payable as at the end of June is $282.

Sales staff work every single day during the week including weekends and are paid on a weekly basis. Wages were last paid up to and including 24 June. Wages incurred after that day (from June 25 to June 30 inclusive) are estimated to have been $1,890 per day.
Interest expense incurred during the month of June but not yet paid to ZNZ Bank for the bank loan is $265.

Office supplies totaling $1,944 are still on hand at June 30.

One month of prepaid rent expired during June. Remember that at the beginning of June, the business paid two month's worth of rent in advance.

3 months of advertising remained pre-paid at the start of June.
5 months of insurance remained pre-paid at the start of June.

When calculating the portion of prepayments that expire during the month of June, you are asked to assume that an equal amount of expense is incurred per month.

After taking a physical count of inventory at the end of the month, the balance of inventory on hand as at June 30 is found to be equal to the closing balance of the Merchandise Inventory account. This means there is no adjusting entry required for inventory shrinkage.

Reference no: EM131751250

Questions Cloud

Discuss what amount should gore report as interest expense : What amount should Gore report as interest expense for the six months ended June 30, 2017
Write the four parts for a one-sided hypothesis test : Consider a random sample of size 20 from a normal population with hypothesized mean 1.618.
Evaluate research situations using the t test : Evaluate research situations using the t test.Identify the assumptions of the independent samples t test.
Find the value of the test statistic : Compute the sample mean, the sample standard deviation, and the value of the test statistic. Draw a conclusion about the population mean.
How depreciation is calculated on a monthly basis : When calculating the portion of prepayments that expire during the month of June, you are asked to assume that an equal amount
Dsecribe what arguments most influenced your decision : Dsecribe what arguments most influenced your decision? How would you explain your position to someone who disagrees with you?
Open T accounts and post to the shareholders equity accounts : Page Corporation, a publicly traded company, was organized on January 1, 2018. Open T accounts and post to the shareholders' equity accounts
Discuss relevant data and forget about the irrelevant data : Accounting systems should produce only relevant data and forget about the irrelevant data
Describe the securities laws that might apply : The Care Assist Company, a web-based provider of information for the elderly, is planning to sell $4 million in securities. Management is trying to decide.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd