Answer and Explanation:
The journal entry required to close the expense account is given below:
Income summary Dr $33,520
To Wages Expense $19,000
To Depreciation Expense $1,800
To Utilities Expense $320
To Insurance Expense $700
To Maintenance Expense $9,000
To Income Tax Expense $2,700
(being the expenses accounts are closed)
Answer:
600,000
Explanation:
The unit of the activity depreciation method is suited for the coal company. This method determines the depreciation amount based on the level of usage. The calculation of depreciation amount using a unit of activity is the first step.
Depreciation per unit is calculated as follows
Depreciation per unit for the coal company
= Cost of the asset/ expected usage
=$12,000,000/ 20,000,000 tons
=$0.6 per ton
In 1, 000,000 coal value was extratced,
Amount of depreciation = $0.6 x 1,000,000
=$600,000