Accounting Final

depletion

how much of natural resource to expense

depreciation is used

how much of plant asset to expense

Cash>BV=

gain on sale

A compound journal entry involves A) four or more accounts. B) two accounts. C) three or more accounts. D) three accounts.

C) three or more accounts.

A list of accounts and their balances at a given time is called a(n) A) journal. B) posting. C) trial balance. D) income statement.

C) trial balance.

What are the two principal components of stockholders' equity?

Paid in capital and retained earnings

Salaries and Wages Payable

liability

Cash<BV=

loss on sale

record date

no entry

Amounts owed to bank

note payable

paid in capital from treasury stock

paid in capital additional paid in capital

paid in capital in excess of stated value- common stock

paid in capital additional paid in capital

Paid-in Capital in Excess of Par Value - Common Stock

paid in capital- additional paid in capital

Common Stock Classification

paid in capital- capital stock

preffered stock

paid in capital- capital stock

Intangible assets include

patents, trademarks, copyrights, franchises, and goodwill

treasury stock

deducted from total paid in capital and retained earnings

Journalize the following business transactions in general journal form. Identify each transaction by number. 1.Andrew Bird invested $35,000 cash in exchange for stock .2.Hired an employee to be paid $400 per week, starting tomorrow. 3.Paid two years' rent in advance, $7,440. 4.Paid the worker's weekly wage .5.Recorded revenue earned and received for the week, $1,900.

1) debit cash for 35000/ credit common stock for 35000 2) No entry 3) debit prepaid rent for 7440/ credit cash 7440 4) debit salaries and wage expense for 400/ credit cash for 400 5) debit cash for 1900/ credit service revenue for 1900

Prepare adjusting entries for the following transactions. 1.Depreciation on equipment is $900 for the accounting period. 2.There was no beginning balance of supplies and purchased $500 of supplies during the period. At the end of the period $150 of supplies were on hand. 3.Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $400 was unexpired.

1) debit depreciation expense for 900/ credit accumulated depreciation-equipment for 900 2) debit supplies expense 350/ credit supplies 350 3) debit rent expense for 600/ credit prepaid rent for 600

If the preferred stock is cumulative, how much of the $500,000 would be paid to common stockholders?

140000

The balance sheet for Lauren Inc. shows the following: total paid-in capital and retained earnings $877,000, total stockholders' equity $817,000, common stock issued 44,000 shares, and common stock outstanding 38,000 shares.

21.5

If the preferred stock is not cumulative, how much of the $500,000 would be paid to common stockholders?

380000 . ( 500,000- (100,000x20x.06)

The following expenditures were incurred by McCoy Company in purchasing land: cash price $50,000, accrued taxes $3,000, attorneys' fees $2,500, real estate broker's commission $2,000, and clearing and grading $3,500. What is the cost of the land?

61000

Stahl Consulting started the year with total assets of $60000 and total liabilities of $15000. During the year, the business recorded $48000 in catering revenues and $30000 in expenses. Stahl issued stock of $9000 and paid dividends of $15000 during the year. The stockholders' equity at the end of the year was A) $57000. B) $33000. C) $63000. D) $54000

A) $57000.

Which of the following is in accordance with generally accepted accounting principles? A) Accrual-basis accounting B) Cash-basis accounting C) Both accrual-basis and cash-basis accounting D) Neither accrual-basis nor cash-basis accounting

A) Accrual-basis accounting

Liabilities of a company would not include A) cash. B) notes payable. C) accounts payable. D) salaries and wages payable.

A) cash.

Collection of a $1000 Accounts Receivable A) increases an asset $1000; decreases an asset $1000. B) decreases an asset $1000; decreases a liability $1000. C) decreases a liability $1000; increases stockholders' equity $1000. D) increases an asset $1000; decreases a liability $1000.

A) increases an asset $1000; decreases an asset $1000.

The left side of an account is A) the debit side. B) blank. C) a description of the account. D) the balance of the account

A) the debit side.

Sound Tracker Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is $37,000, on the delivery equipment

Accumulated depreciation equipment debit 37000/ loss on disposal of plant assets debit 4000/ equipment credit 41000

Sound Tracker Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No salvage value is received.

Accumulated depreciation equipment debit for 41000/ equipment credit for 41000

A T-account is A) a special account used instead of a trial balance. B) a way of depicting the basic form of an account. C) what the computer uses to organize bytes of information. D) used for accounts that have both a debit and credit balance

B) a way of depicting the basic form of an account.

Adjusting entries can be classified as A) accruals and advances. B) accruals and deferrals. C) postponements and advances. D) deferrals and postponements.

B) accruals and deferrals.

After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the A) adjustments columns of the worksheet. B) adjusted trial balance. C) the general journal. D) post-closing trial balance.

B) adjusted trial balance.

For the basic accounting equation to stay in balance, each transaction recorded must A) affect the same number of asset and liability accounts. B) affect two or more accounts. C) affect two or less accounts. D) always affect exactly two accounts.

B) affect two or more accounts.

Each of the following accounts is closed to Income Summary except A) expenses. B) dividends. C) revenues. D) all of these are closed to Income Summary.

B) dividends.

A net loss will result during a time period when A) dividends exceed investments. B) expenses exceed revenues. C) revenues exceed expenses. D) liabilities exceed assets.

B) expenses exceed revenues.

John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a A) proprietorship. B) partnership. C) corporation. D) joint venture.

B) partnership.

In order to close the dividends account, the A) retained earnings account should be credited. B) retained earnings account should be debited. C) income summary account should be credited. D) income summary account should be debited.

B) retained earnings account should be debited.

The normal balance of any account is the A) right side. B) side which increases that account. C) side which decreases that account. D) left side.

B) side which increases that account.

Closing entries are made A) so that financial statements can be prepared. B) so that all assets, liabilities, and stockholders' equity accounts will have zero balances when the next accounting period starts. C) in order to transfer net income (or loss) and dividends to the retained earnings account. D) in order to terminate the business as an operating entity.

C) in order to transfer net income (or loss) and dividends to the retained earnings account.

The economic entity assumption requires that the activities A) of a sole proprietorship cannot be distinguished from the personal economic events of its owners. B) of different entities can be combined if all the entities are corporations. C) of an entity be kept separate from the activities of its owner. D) must be reported to the Securities and Exchange Commission.

C) of an entity be kept separate from the activities of its owner.

Stockholders' equity can be described as A) creditorship claim on total assets. B) benefactor's claim on total assets. C) ownership claim on total assets. D) debtor claim on total assets.

C) ownership claim on total assets.

In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8.Assuming there are 360 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Bethke uses a periodic inventory system. Cost of the ending inventory FIFO Cost of the ending inventory LIFO

FIFO 2720 LIFO 2220

Amounts owed to suppliers for goods and services purchased

accounts payable

Campanez Company purchases a patent for $140,000 on January 2, 2020. Its estimated useful life is 10 years. Prepare the journal entry to record amortization expense for the first year.

amortization expense debit 14000/ patents credit 14000

Mar.2Issued 5,000 shares of $5 par value common stock to attorneys in payment of a bill for $30,000 for services performed in helping the company to incorporate.

debit organization expense for 30000 credit common stock for 25000 credit paid in capital in excess of par common stock 5000

Journalize the transactions, assuming that the common stock is no-par with a stated value of $1 per share Jan.10 Issued 70,000 shares for cash at $5 per share. July 1 Issued 40,000 shares for cash at $7 per share. Journalize the transactions, assuming that the common stock has a par value of $5 per share

jan 10 debit cash 350000 credit common stock 70000 credit paid in capital in excess to stated value- common stock 280000 july 1 debit cash 280000 credit common stock 40000 credit paid in capital in excess to stated value-common stock 240000

Notes Payable

liability

Which of the following correctly identifies normal balances of accounts? A) AssetsDebitLiabilitiesCreditStockholders' EquityCreditRevenuesCreditExpensesDebit B) AssetsDebitLiabilitiesCreditStockholders' EquityCreditRevenuesDebitExpensesCredit C) AssetsDebitLiabilitiesCreditStockholders' EquityCreditRevenuesCreditExpensesCredit D) AssetsCreditLiabilitiesDebitStockholders' EquityDebitRevenuesCreditExpensesDebit

A) AssetsDebitLiabilitiesCreditStockholders' EquityCreditRevenuesCreditExpensesDebit

Which of the following would not be considered internal users of accounting data for a company? A) Creditors of a company. B) The president of a company. C) Salesmen of the company. D) The controller of a company

A) Creditors of a company.

Meat Puppets Company purchased equipment for $7200 on December 1. It is estimated that annual depreciation on the equipment will be $1800. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: A) Debit Depreciation Expense, $150; Credit Accumulated Depreciation, $150. B) Debit Depreciation Expense, $5400; Credit Accumulated Depreciation, $5400. C) Debit Depreciation Expense, $1800; Credit Accumulated Depreciation, $1800. D) Debit Equipment, $7200; Credit Accumulated Depreciation, $7200.

A) Debit Depreciation Expense, $150; Credit Accumulated Depreciation, $150.

A credit is not the normal balance for which account listed below? A) Dividends account B) Common stock account C) Revenue account D) Liability account

A) Dividends account

A candy factory's employees work overtime to finish an order that is sold on February 28. The office sends a statement to the customer in early March and payment is received by mid-March. The overtime wages should be expensed in A) February. B) March. C) the period when the workers receive their checks. D) either in February or March depending on when the pay period ends.

A) February.

GAAP stands for A) Generally Accepted Accounting Principles. B) Generally Accepted Auditing Principles. C) Generally Accepted Accounting Procedures. D) Generally Accepted Auditing Procedures.

A) Generally Accepted Accounting Principles.

A debit to an asset account indicates A) an increase in the asset. B) a credit was made to a liability account. C) an error. D) a decrease in the asset.

A) an increase in the asset.

The expense recognition principle matches A) expenses with revenues. B) customers with businesses. C) creditors with businesses. D) assets with liabilities.

A) expenses with revenues.

Olathe Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,000 (cost $61,000 less accumulated depreciation $30,000). Its fair value is $33,000, and cash of $5,000 is paid.Prepare the entry to record the exchange.

Accumulated depreciation-equipment debit 30000 Equipment debit 38000 cash credit 5000 gain on disposal of plant assets credit 2000 equipment credit 61000

The accounting equation for Quattro Enterprises is as follows: Assets Liabilities Stockholders' Equity$120000=$60000+$60000 If Quattro purchases office equipment on account for $25000, the accounting equation will change to AssetsLiabilitiesStockholders' Equity A) $145000=$60000 +$85000 B) $145000=$85000 +$60000 C) $120000=$60000 +$60000 D) $145000=$72500 +$72500

B) $145000=$85000 +$60000

Misra Company compiled the following financial information as of December 31, 2018: Revenues$340000 Retained earnings(1/1/18)60000 Equipment80000 Expenses250000 Cash90000 Dividends20000 Supplies10000 Accounts payable40000 Accounts receivable70000 Common stock80000 Misra's assets on December 31, 2018 are A) $360000. B) $250000. C) $490000. D) $180000.

B) $250000.

Which of the following is the correct sequence of steps in the recording process? A) Journalizing, analyzing, posting B) Analyzing, journalizing, posting C) Posting, journalizing, analyzing D) Analyzing, posting, journalizing

B) Analyzing, journalizing, posting

A debit is not the normal balance for which of the following? A) Expense account B) Common stock account C) Asset account D) Dividends account

B) Common stock account

Lake of Fire Company purchased supplies costing $7000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of supplies revealed $1900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be A) Debit Supplies, $1900; Credit Supplies Expense, $1900. B) Debit Supplies Expense, $5100; Credit Supplies, $5100. C) Debit Supplies, $5100; Credit Supplies Expense, $5100. D) Debit Supplies Expense, $1900; Credit Supplies, $1900

B) Debit Supplies Expense, $5100; Credit Supplies, $5100.

Live Wire Hot Rod Shop follows the revenue recognition principle. Live Wire services a car on July 31. The customer picks up the vehicle on August 1 and mails the payment to Live Wire on August 5. Live Wire receives the check in the mail on August 6. When should Live Wire show that the revenue was recognized? A) August 6 B) July 31 C) August 1 D) August 5

B) July 31

Which of the following is an external user of accounting information? A) Finance directors. B) Labor unions. C) Company officers. D) Managers.

B) Labor unions.

Which one of the following is not a part of an account? A) Debit side B) Trial balance C) Title D) Credit side

B) Trial balance

A dividend is A) equal to assets minus stockholders' equity. B) a distribution of the company's earnings to its stockholders. C) equal to revenues less expenses. D) equal to liabilities minus stockholders' equity.

B) a distribution of the company's earnings to its stockholders.

An accounting time period that is one year in length, but does not begin on January 1, is referred to as A) the time period assumption. B) a fiscal year. C) a reporting period. D) an interim period.

B) a fiscal year.

Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that costs $475000. The market value of his residence is $625000. During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is A) the monetary unit assumption. B) the economic entity assumption. C) convergence. D) the fair value principle.

B) the economic entity assumption.

Mofro's Computer Repair Shop started the year with total assets of $300000 and total liabilities of $200000. During the year, the business recorded $500000 in computer repair revenues, $300000 in expenses, and Mofro paid dividends of $50000. The net income reported by Mofro's Computer Repair Shop for A) $100000. B) $150000. C) $200000. D) $250000.

C) $200000.

Mofro's Computer Repair Shop started the year with total assets of $300000 and total liabilities of $200000. During the year, the business recorded $500000 in computer repair revenues, $300000 in expenses, and Mofro paid dividends of $50000. Stockholders' equity at the end of the year was A) $200000. B) $100000. C) $250000. D) $300000.

C) $250000.

Which account below is not a subdivision of retained earnings? A) Revenues B) Expenses C) Common stock D) Dividends

C) Common stock

Net income results when A) Assets > Liabilities. B) Revenues = Expenses. C) Revenues > Expenses. D) Revenues < Expenses.

C) Revenues > Expenses.

A post-closing trial balance is prepared A) before closing entries have been journalized and posted. B) before closing entries have been journalized but after the entries are posted. C) after closing entries have been journalized and posted. D) after closing entries have been journalized but before the entries are posted.

C) after closing entries have been journalized and posted.

A balance sheet shows A) expenses, dividends, and stockholders' equity. B) revenues, expenses, and dividends. C) assets, liabilities, and stockholders' equity. D) revenues, liabilities, and stockholders' equity.

C) assets, liabilities, and stockholders' equity.

Owners enjoy limited liability in a A) proprietorship. B) sole proprietorship. C) corporation. D) partnership.

C) corporation.

Martin Corporation purchased land in 2010 for $290000. In 2018, it purchased a nearly identical parcel of land for $460000. In its 2018 balance sheet, Martin valued these two parcels of land at a combined value of $920000. By reporting the land in this manner, Martin Corp. has violated the A) monetary unit assumption B) economic entity assumption C) historical cost principle D) convergence

C) historical cost principle

The accounting process is correctly sequenced as A) communication, recording, identification. B) recording, communication, identification. C) identification, recording, communication. D) identification, communication, recording

C) identification, recording, communication.

Closing entries are necessary for A) permanent or real accounts only. B) both permanent and temporary accounts. C) temporary accounts only. D) permanent accounts only.

C) temporary accounts only.

In recording an accounting transaction in a double-entry system A) the number of debit accounts must equal the number of credit accounts. B) there must always be entries made on both sides of the accounting equation. C) the amount of the debits must equal the amount of the credits. D) there must only be two accounts affected by any transaction.

C) the amount of the debits must equal the amount of the credits.

A basic assumption of accounting assumes that the dollar is A) a poor measure of economic activities. B) useless in measuring an economic event. C) the common unit of measure for all business transactions. D) unrelated to business transactions.

C) the common unit of measure for all business transactions.

The revenue recognition principle dictates that revenue should be recognized in the accounting records A) at the end of the month. B) in the period that income taxes are paid. C) when the performance obligation is satisfied. D) when cash is received.

C) when the performance obligation is satisfied.

If total liabilities increased by $30000 and stockholders' equity increased by $20000 during a period of time, then total assets must change by what amount and direction during that same period? A) $10000 decrease B) $50000 decrease C) $10000 increase D) $50000 increase

D) $50000 increase

Owner's equity is best depicted by the following: A) Assets = Liabilities. B) Liabilities + Assets. C) Residual equity + Assets. D) Assets - Liabilities.

D) Assets - Liabilities.

A debit is not the normal balance for which account listed below? A) Dividends B) Cash C) Accounts Receivable D) Service Revenue

D) Service Revenue

Accumulated Depreciation is A) a liability account. B) an expense account. C) a stockholders' equity account. D) a contra asset account.

D) a contra asset account.

An adjusting entry A) affects two balance sheet accounts. B) is always a compound entry. C) affects two income statement accounts. D) affects a balance sheet account and an income statement account.

D) affects a balance sheet account and an income statement account.

Unearned revenues are A) revenue for services performed and recorded as liabilities before they are received. B) revenue for services performed but not yet received in cash or recorded. C) revenue for services performed and already received in cash and recorded. D) cash received and a liability recorded before services are performed.

D) cash received and a liability recorded before services are performed.

Closing entries A) are prepared before the financial statements. B) summarize the activity in every account. C) reduce the number of permanent accounts. D) cause the revenue and expense accounts to have zero balances.

D) cause the revenue and expense accounts to have zero balances.

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a A) debit to the dividends account. B) credit to the dividends account. C) debit to the retained earnings account. D) credit to the retained earnings account.

D) credit to the retained earnings account.

An account will have a credit balance if the A) debits exceed the credits. B) last transaction entered was a credit. C) first transaction entered was a credit. D) credits exceed the debits.

D) credits exceed the debits.

Credits A) increase assets and decrease liabilities. B) increase both assets and liabilities. C) decrease both assets and liabilities. D) decrease assets and increase liabilities.

D) decrease assets and increase liabilities.

The double-entry system requires that each transaction must be recorded A) first as a revenue and then as an expense. B) in a journal and in a ledger. C) in two sets of books. D) in at least two different accounts.

D) in at least two different accounts.

The right side of an account A) is the correct side. B) reflects all transactions for the accounting period. C) shows all the balances of the accounts in the system. D) is the credit side.

D) is the credit side.

A post-closing trial balance will show A) only temporary account balances. B) zero balances for all accounts. C) the amount of net income (or loss) for the period. D) only permanent account balances.

D) only permanent account balances.

An income statement A) summarizes the changes in retained earnings for a specific period of time. B) reports the changes in assets, liabilities, and stockholders' equity over a period of time. C) reports the assets, liabilities, and stockholders' equity at a specific date. D) presents the revenues and expenses for a specific period of time.

D) presents the revenues and expenses for a specific period of time.

A small neighborhood barber shop that is operated by its owner would likely be organized as a A) partnership. B) joint venture. C) corporation. D) proprietorship.

D) proprietorship.

Retained earnings at the end of the period is equal to A) net income. B) assets plus liabilities. C) retained earnings at the beginning of the period plus net income minus liabilities. D) retained earnings at the beginning of the period plus net income minus dividends.

D) retained earnings at the beginning of the period plus net income minus dividends.

Show how this patent is reported on the balance sheet at the end of the first year.

Intangible assets patents 126000( purchase of patent- amortization expense)

Jan.10 Issued 70,000 shares for cash at $5 per share. July 1 Issued 40,000 shares for cash at $7 per share. Journalize the transactions, assuming that the common stock has a par value of $5 per share

Jan 10. debit cash 350000 credit common stock 350000 July1 debit cash 280000 credit common stock 200000 credit paid in capital in excess to par- common stock 800000

On January 1, Guillen Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred. Apr.1 Issued 25,000 additional shares of common stock for $17 per share. June 15 Declared a cash dividend of $1 per share to stockholders of record on June 30. July 10 Paid the $1 cash dividend .Dec.1 Issued 2,000 additional shares of common stock for $19 per share. 15 Declared a cash dividend on outstanding shares of $1.20 per share to stockholders of record on December 31.

June 15 : debit cash dividends 120,000/ credit dividends payable 120000 July 10: debit dividends payable for 120000/ credit cash 120000 Dec.15: debit cash dividend 146400/ credit dividends payable 146400 (120,000+2,000x1.20)

The corporate charter of Luney Corporation allows the issuance of a maximum of 100,000 shares of common stock. During its first two years of operations, Luney sold 70,000 shares to shareholders and reacquired 7,000 of these shares. After these transactions, how many shares are authorized, issued, and outstanding?

Luney Corporation is authorized to sell 100000shares. 70000 shares issued 63000 shares outstanding

Amounts due from customers

accounts receivable

Buildings

asset

Supplies

asset

Cash=BV

breakeven

Revenue expenditures are repairs that a company makes to maintain the productive life of an asset and they are usually small in price. Capital expenditures are higher in price and are made in order to improve the operating activity.

capital expenditures to improve operating activity

Party to whom money is owed

creditor

Hodge Corporation issued 100,000 shares of $20 par value, cumulative, 6% preferred stock on January 1, 2019, for $2,300,000. In December 2021, Hodge declared its first dividend of $500,000. Prepare Hodge's journal entry to record the issuance of the preferred stock.

debit cash 2300000 credit preferred stock 2000000 credit paid in capital in excess tp par-preferred stock 300000

On May 10, Jack Corporation issues 2,000 shares of $10 par value common stock for cash at $18 per share.

debit cash 36000 credit common stock 20000 credit paid in capital in excess to par value-common stock 16000

Greenwood Corporation has 80,000 shares of common stock outstanding. It declares a $1 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31.

debit cash dividend 80000 credit dividend payable 80000 debit dividend payable 80000 credit cash 80000

July 11 Issued 1,000 shares of $100 par value preferred stock for cash at $110 per share.

debit cash for 110000 credit preferred stock for 100000 credit paid in capital in excess of par preferred stock 10000

June12Issued 60,000 shares of $5 par value common stock for cash of $375,000.

debit cash for 375000 credit common stock for 300000 credit paid in capital in excess of par common stock 75000

Garb Inc. issues 5,000 shares of $100 par value preferred stock for cash at $130 per share.

debit cash for 650000 credit preferred stock 500000 credit paid in capital in excess to par-preferred stock 150000

payment date

debit dividends payable credit cash

declaration date

debit dividends, credit dividends payable

Blue Guitar Music School borrowed $30,000 from the bank signing an 8%, 6-month note on November 1. Principal and interest are payable to the bank on May 1. If the company prepares monthly financial statements, what adjusting entry should the company make at November 30 with regard to the note?

debit interest expense for 200/ credit interest payable for 200

Lei Inc.'s $10 par value common stock is actively traded at a market price of $15 per share. Lei issues 5,000 shares to purchase land advertised for sale at $85,000.

debit land 75000 credit common stock 50000 credit paid in capital in excess to par- common stock 25000

Lei Inc.'s $10 par value common stock is actively traded at a market price of $15 per share. Lei issues 5,000 shares to purchase land advertised for sale at $85,000.Journalize the issuance of the stock in acquiring the land.

debit land for 75,000 credit common stock for 50000 credit paid in capital in excess of par-common stock 25000

Nov.28 Purchased 2,000 shares of treasury stock for $80,000.

debit treasury stock for 80000 credit cash for 80000

On January 1, Chan & Chan, CPAs received a $15,000 cash retainer for accounting services to be rendered ratably over the next 3 months. The full amount was credited to the liability account Unearned Service Revenue. Assuming that the revenue is recognized equally over the 3-month period, what adjusting journal entry should be made at January 31?

debit unearned service revenue for 5000/ credit service revenue for 5000

Accounts receivable

debit+; credit-; normal balance debit

Dividends

debit+; credit-; normal balance debit

Salaries and wages expense

debit+; credit-; normal balance debit

Common stock

debit-; credit+; normal balance credit

Service revenue

debit-; credit+; normal balance credit

retained earnings

retained earnings

The adjusted trial balance of Rocky Acre Spread Inc. on December 31, 2018 includes the following accounts: Accumulated Depreciation, $6,000; Depreciation Expense, $2,000; Notes Payable $7,500; Interest Expense $150; Utilities Expense, $300; Rent Expense, $500; Service Revenue, $19,600; Salaries and Wages Expense, $6,000; Supplies, $200; Supplies Expense, $1,200; Salaries and Wages Payable, $600.Prepare an income statement for the month of December.

revenues -expenses netincome/loss

Dividends

stockholders equity

Amortization

the process of allocating to expense the cost of an intangible asset

The straight-line method uses the calculation of cost minus salvage value divided by its useful life in years. In the units-of activity method you use the same formula except instead of dividing by the useful life in years you divide by the useful life in units and that will give you a rate of depreciation that you can use year after year.

units of activity method divide by useful life in units not years

In the straight-line method the pattern of periodic depreciation over its useful life remains constant and for the units-of-activity method it is variable.

units of activity method is variable