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Evgesh-ka [11]
3 years ago
13

On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 f

or Banes Domino's Company. Banes Domino's Company
Adjusted Trial Balance
March 31, 20--
1 Account Title Debit Credit 1
2 Cash 30,000.00
3 Accounts Receivable 45,200.00
4 Supplies 5,000.00
5 Equipment 169,900.00
6 Accumulated Depreciation 32,000.00
7 Accounts Payable 12,500.00
8 Jack Banes, Capital 71,600.00
9 Jack Banes, Drawing 47,000.00
10 Fees Earned 510,000.00
11 Salary Expense 244,500.00
12 Rent Expense 48,000.00
13 Depreciation Expense 25,000.00
14 Supplies Expense 9,500.00
15 Miscellaneous Expense 2,000.00
16 Totals 626,100.00 626,100.00
Required:
Journalize the four closing entries. Refer to the Chart of Accounts for exact wording of account titles. The journal should consist of 12 rows.
Chart of Accounts.
Banes Domino's CorporationGeneral Ledge
Assets
1 Cash
2 Accounts Receivable
3 Supplies
4 Equipment
5 Accumulated Depreciation
Liabilities
5 Accounts Payable
Equity
6 Common Stock
7 Retained Earnings
8 Dividends
9 Income Summary
Revenue
10 Fees Earned
Expenses
11 Salary Expense
12 Rent Expense
13 Depreciation Expense
14 Supplies Expense
15 Miscellaneous Expense
Business
1 answer:
max2010maxim [7]3 years ago
5 0

Answer:

Banes Domino's Company

Closing Entries

Date      Acct.No              Account                    Debit                 Credit

                 9           Income Summary             329,000.00

                 11                  Salary Expense                              244,500.00

                 12                 Rent Expense                                48,000.00

                 13       Depreciation Expense                           25,000.00

                 14         Supplies Expense                                  9,500.00

                15     Miscellaneous Expense                              2,000.00

Expenses are closed to Income Summary Account.

                10               Fees Earned                  510,000.00

                   9           Income Summary                                  510,000.00

Revenue Accounts are closed to Income Summary Account.

                              9           Income Summary   181,000.00

                                        Jack Banes, Capital                      181,000.00

To close Income Summary Account

                           Jack Banes, Capital    47,000.00

                             Jack Banes, Drawing                               47,000.00

To Close withdrawals account.

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Answer:

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Being entries to derecognize cost of  asset on disposal

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Being entries to derecognize the accumulated depreciation of asset as at date of disposal

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Being entries to record amount received on disposal of asset

b. Debit Other income/disposal account (p/l)   $204,000

   Credit Asset account  $204,000

Being entries to derecognize cost of  asset on disposal

   Debit Accumulated depreciation account  $150,800

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Being entries to derecognize the accumulated depreciation of asset as at date of disposal

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Being entries to derecognize the accumulated depreciation of asset as at date of destruction of machine by fire

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Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

When the amount received from the disposal of an asset is higher than the carrying value of the asset, the company makes a gain on disposal. The proceed from the disposal of an asset may be recorded in the disposal or other income account.

On disposal, the carrying amount of the asset is derecognized by  

Debit Other income/disposal account (p/l)

Credit Asset account  

with the cost of the asset, then,

Debit Accumulated depreciation account

Credit Other income/disposal account (p/l)

With the accumulated depreciation of the asset at the date of disposal,

Furthermore,

Debit Cash account

Credit Other income/disposal account (p/l)

with the amount received from the disposal or sale of the asset

Total cost = $192000 + $10000 + $2000

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