Reference no: EM132662966

Questions -

Question 1 - A review of the ledger of Kinsley Company at December 31, 2019, produces the following data.

1: There are eight salaried employees in the company. Salaries are paid every Thursday for the current week. Five employees receive a salary of $900 each per week, and three employees earn $700 each per week. Employees work five days week (Sunday to Thursday, two days are unpaid and free). Assume December 31 is a Tuesday. All the employees work through December 31st.

2: The supplies account began the year with a balance of $2000. During the year, supplies in the amount of $ 1400 were purchased. At the end of the year the supplies on hand was $2200.

3: Kinsley Company signed a $6,000, 3-month note payable on November 1.The note requires Kinsley to pay interest at an annual rate of 14%.

4: On December 1, 2019, Kinsley Company collected $36000 for services to be performed from December 1, 2019, through March 31, 2020.It is expected that same amount of service will be provided every month.

5: Kinsley Company purchased a one-year insurance policy on September 1 for $12,000.

6: The office furniture was bought for $30000 on September 1, 2019. The furniture has 5 year life with no salvage value.

Instructions - Prepare the annual adjusting entries needed at December 31, 2019.

Question 2: Nurzahan Printing Press has 3 printing machines. Because of some unidentifiable reasons, the company follows different depreciation method for each of the machines. The information regarding the 3 Machines are given below.

Machine A was purchased on October 1,2018. For calculating the depreciation of this machine, the company follows the Declining Balance method. The cost and salvage value of the machine is $32,000 and $6,000 respectively. The machine is expected to remain in use for 8 years.

Machine B was purchased on March 1,2018. For calculating the depreciation of this machine, the company follows the unit of activity method. The cost and salvage value of the machine is $28,000 and $4,000 respectively. The machine is expected to remain in use for 10 years.

Machine C was purchased on January 1,2018. For calculating the depreciation of this machine, the company follows the straight line method. The cost and salvage value of the machine is $70,000 and $12,000 respectively. The machine is expected to remain in use for 8 years.

For the unit of activity method, Machine B is expected to be used for 40,000 hours. Actual hours used in the year 2018 and 2019 were 17,200 hours and 5,800 hours respectively.

Instructions - You have to prepare the complete depreciation schedule for the first 2 years for the 3 machines in the given table.