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31 a building was purchased for 75 000 assuming annual depreciation of 2 500 the boo 4297086

 

31. A building was purchased for $75,000. Assuming annual depreciation of $2,500, the book value of the building one year later is $77,500. 
 

32. A contra asset account for Land will normally appear in the balance sheet. 
 

33. Depreciation Expense is reported on the balance sheet as an addition to the related asset. 
 

34. A company pays $12,000 for twelve month's rent on October 1. The adjusting entry on December 31 is debit Rent Expense, $4,000 and credit Prepaid Rent, $4,000. 
 

35. A company pays $240 for a yearly trade magazine on August 1. The adjusting entry on December 31 is debit Unearned Subscription Revenue, $100 and credit Subscription Revenue, $100. 
 

36. A company depreciates its equipment $350 a year. The adjusting entry for December 31 is debit Depreciation Expense, $350 and credit Equipment, $350. 
 

37. A company pays an employee $1,000 for a five day work week, Monday – Friday. The adjusting entry on December 31, which is a Wednesday, is debit Wages Expense, $200 and credit Wages Payable, $200. 
 

38. A company pays $5,600 for two season tickets on September 1. If $1,400 is earned by December 31, the adjusting entry made at that time is debit Cash, $1,400 and credit Ticket Revenue, $1,400. 
 

39. A company does not realize that the last two day's revenue for the month was not recorded. The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned. 
 

40. The balance in the prepaid insurance account before adjustment at the end of the year is $4,000. The amount of the journal entry required to record insurance expense will be $2,500 if the amount of unexpired insurance applicable to future periods is $1,500. 
 

 

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