1. How much is the computed annual depreciation?

750000 divided by 10 is 75,000

Answer: 75,000
2. How much is the computed depreciation as of December 31, 20A?
Answer:31250
3. What is the journal entry to record depreciation on December 31, 20A
Depreciation Expense 31250
Accumulated Depreciation 31250
To record depreciation expense from the period Oct.1 to December 31, 20A
4.How much is the carrying value of L300 van as of December 31, 20A
Answer: 718750

Assuming the L300 van has a scrap value of 10,000

1. How much is the computed annual depreciation?
Answer: 74,000
2.How much is the computed depreciation as of December 31, 20A
Answer: 30833.33
3. If at the end of one year, the L300 is sold for 575,000, how much is the gain or loss on disposal?
The loss on disposal in 100000.
4. What is the journal entry to record the sale of the L300 van?
Cash 575,000
Acc. Depreciation- Transport Equipment 75,000
Loss on Disposal of office equipment 100,000
Office Equipment 750,000
It has been the practice of Melvin Tan, Jr., owner of Dapitan Hometel to directly write-off any collectible amount that goes beyo
Revenue and Accounts Receivable accounts revealed the following:

If accounts receivable, End was 70,000, how much was the amount of directly written-off during the year?

Answer:
Uncollectible Account Expense 70,000
Accounts Receivable 70,000
To write off the account
ollectible amount that goes beyond two-year period of being an outstanding account. An Analysis of the Service Revenue

ng the year?
ervice Revenue
Assuming that Income Method is used
1. What is the journal entry to record pre-collection?
Cash 180,000
Rent Income 180,000
To record collection of advance rental for the period from Oct. 1, 20A to Oct. 1,20B
2.In your adjusting entry, what account will you record, Income or Liability?
Income
3. What is the adjusting entry on Dec 31, 20A?
Rent Income 45,000
Unearned Rent Income 45,000
To record the unearned portion (liability) of rental collected in advance
4. In your adjusting entry are you increasing or decreasing the amount of your Rental Income account
Decreasing

Assuming that Liability Method is used

1. What is the journal entry to record pre-collection?
Cash 180,000
Unearned Rent Income 180,000
To record collection of advance rental for the period from Oct. 1 20A to Oct. 1, 20B
2. In your adjusting entry, what account will you record, Income or Liability?
Liability
3. What is your adjusting entry on Dec 31, 20A?
Unearned Rent Income 45,000
Rent Income 45,000
To record the earned portion (income) of rental collected in advance.
4.In your adjusting entry are you increasing or decreasing the amount of your Unearned Rental Income Account?
Decreasing
al Income Account?
Book of E. Gevera Realty Book of Metro Drug Company

Accrued Rent Receivable Rent Expense

Rent Income Accrued Rent Expense
Metro Drug Company

Accrued Rent Expense

Assuming Expense Method is Used
1. What is the journal entry to record the prepayment
Insurance Expense 24,000.00
Cash 24,000.00
Paid insurance premium paid
2. In your adjusting entry, account will you record? Expense or Asset?
Expense
3. What is your adjusting entry on December 31, 20A?
Prepaid Insurance 10,000.00
Insurance Expense 10,000.00
4. In your adjusting entry,are you increasing or decreasing the amount of your Insurance Expense Account?
Decreasing

Assuming Asset Method is Used

1. What is the journal entry to record the prepayment?
Prepaid Insurance 24,000
Cash 24,000
Paid Insurance premium
2. In your adjusting entry, account will you record? Expense or Asset?
Asset
3. What is your adjusting entry on Decemer 31, 20A?
Insurance Expense 24,000.00
Prepaid Insurance 24,000.00
To record the expired portion of insurance premium from August 1, 20A to December 31, 20A
4. In your adjusting entry, are you increasing or decreasing the amount of your prepaid insurance account?
Decreasing
se Account?

December 31, 20A