Journal Entry, Trial balance, adjusting entries and Preparing worksheets.

Question

JUNE 2017

June 8: Logan invested 500,000 to start his business, name as Lee Hotel

June 9: Bought 800,000 worth Kitchen Equipment from KIT Supply. Terms 20% down payment and the remaining balance on account.

June 10: Bought Kitchen supplies from Tim supplies on credit, 35,000.

June 11: Returned 3,000 defective supplies bought from Tim supplies.

June 12: Bought furniture from Wen Furniture on account, 11,000.

June 13: Bought office suplies using cash, 200.

June 14: Paid 180,000 as partial payment of account to KIT supply.

June 15: Rendered dental services to Dan on account 10,000.

June 21: Collection of account from Dan

June 22: Dental Services rendered for cash to Ms. Shim, 2,000.

June 23: Full Settlement of account with Kit Supply

June 25: Full settlement of account with Wen Furniture.

June 28: Paid assistant's salaries, 16,000.

June 29: Received bill form meralco, 1,800.

June 31: Paid the note issued to Dental supply

Adjusting Entry:

1. Kitchen Equiment has an estimated useful life of 10 years and a salvage value of 50,000.00
2. Furniture has useful life of 5 years and salvage value of 2,000.00
3. Make Adjusting entry for the month ended July 2017

Answer 1

Assuming that the client uses the straight line method of depreciation, the adjusting entry for depreciation for the month ended July 31, 2017 is as follows:

Dr. Depreciation Expense 6,400

Cr. Accumulated Depreciation - Kitchen Equipment 6,250

Cr. Accumulated Depreciation - Office Furniture 150

Explanation:

Cost of Kitchen Equipment $800,000

Less: Salvage value -$50,000

Depreciable cost $750,000

Useful life 10 years

Annual depreciation $75,000

Depreciation for July 2017= $75,000 /12 months =$6,250

Cost of Furniture $11,000

Less: Salvage value -2,000

Depreciable cost $9,000

Useful life 5 years

Annual depreciation $1,800

Depreciation for July 2017 = $1,800/12 months = $150