Accounting Answers

Swindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2007, the company purchased a machine costing $90,000. The machine's useful life was estimated to be 12 years with a residual value of $18,000. Depreciation for partial years is recorded to the nearest full month.

In 2011, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2011.

a.Prepare journal entries in chronological order for the above events, beginning with the purchase of the machinery on January 11, 2007. Show separately the recording of depreciation expense in 2007 through 2011.

A.   Partner’s G and M have capital account balances of P30,000 and P20,000 respectively. They share profits and losses 3 :1 ratio .

Required Prepare journal entries to record the admission of of P under each of the following condition.

1.   P invested P30,000 for a one fourth interest in the net asset;the total partnership capital after p”s admission will be P80,000.

2.   P invested P30,000 of which P10,000 is a bonus to G and M in conjunction with admission of Padilla , the carrying amount of the inventories is increased by P16,000. Padilla’s capital accounts is credited for P20,000.

Need to name agents, please choose one choice that can be used to name these related agents correctly?

1. The simple way is to use the agent's name, e.g., Name the controller agent David Edwards if this name is his official name.
2. It is good to use the job position to name the agent. This general description can help the conceptualization.
3. It is good to only use two names for the agents: internal agent and external agent.

The supplier master data is important in the internal controls in this business cycle. Please illustrate why the supplier master data is essential to manage risks.

Peace Ltd, a chair manufacturing company, uses the allowance method of accounting for uncollectible accounts receivable. Transactions during the year:

(1)                      5^th Jan               Sold goods @$2,000 on credit to Mr A (originally cost $1,400)

(2)                      8^th Jan               Accepted a 60-day, 10% note for $2,000 from Mr A on account

(3)                      20^th Jan   wrote off a $1,250 account from Open Co as bad debt

(4)                      5^th Feb               Received from Mr A the amount due on his note of 8^th Jan

(5)                      14^th Feb            Reinstated the account of Open Co and recovered $1,000 in cash

(6)                      24^th Feb            Sold goods @$10,000 on credit to Mr B (originally cost $7,700)

(7)                      28^th Feb            It is estimated that 15% of the credit sales on 24^th Feb will be uncollectible

Journalise the transactions given that the accounting period is set at monthly

A contractor offers to purchase your old tractor for $10,000 but cannot pay you the money for

12 months. If you feel i=1% per month is a fair interest rate, what is the present worth to you today

of the $10,000 if it is paid 12 months from now

Record the following transactions using the accounting equation and T accounts.

1.     Paid utilities expense of $2,000.

2.     Reduced note payable with an $8,000 cash payment (ignore interest costs).

3.     Incurred expense of $3,000, to be paid in the future (accounts payable).

4.     Collected $4,000 on an outstanding account receivable.

Record the following transactions using the accounting equation and T accounts.

1.Owner contributed $50,000 in cash for company stock.

2.Purchased building for $120,000, making a $20,000 down payment and signing a promissory note for the balance.

3.Sold products to customers for $15,000 cash.