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  • Module 5

    Enviado por

    Nidhi
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    Bill’s Lawn Care Module 5 Mini Practice Problem Bill’s Lawn Care Module 5 Mini Practice Problem In June, Bill made several purchases to accommodate his growing business. June 2 Bill purchased a storage location for lawn care equipment, paid $45,000 for a building on 1 acre. The land is appraised at $8,000. The building has an estimated life of 10 years with a $5,000 salvage value. Bill paid $2,000 down and financed the remaining purchase price with a 5% 5 year note. June 4 Bill purchased a trailer to haul lawn care equipment for $2,300; estimated life is 5 years with no salvage value. Bill paid for the purchase in cash. June 5 Bill purchased a gas powered trimmer for $1,200 and a commercial leaf-blower for $1,500. Bill estimates they will each have a two year life and no salvage value. Bill paid for both of these pieces of equipment on account. These are in addition to the three assets Bill acquired in May: Date Item Cost Estimated Life Salvage Value May 2 Truck $7,000 5 years $500 5 Lawn Mower $300 2 years $0 5 Aerator $500 2 years $0 Depreciation was recorded in May for these assets using the straight-line method however Bill is considering other depreciation methods and has asked you to prepare a comparison of the straight-line method with the double declining balance (200% DDB) method before he decides. Instructions: 1. Using the chart of accounts provided below and the Excel template provided with this assignment, record the transactions for the new assets purchased in June, 2014. Start with Page 7 for the journal entries. Explanations are optional. 2. Prepare a monthly schedule of depreciation for each of the seven assets for 2014 using 1) straight-line and 2) 200% DDB. (Assume assets purchased before the 15th of the month will be depreciated as if owned for the entire month). Remember that you are calculating monthly depreciation, not annual and adjust your depreciation rate. Carry your depreciation rate to four decimals and round the depreciation expense to two decimals. 3. Bill has decided that equipment will be depreciated using straight-line and the building using 200% DDB. Prepare the adjusting journal entries for depreciation for the month of June, 2014. Start with Page 8 for the adjusting journal entries. Explanations are optional. Bill’s Lawn Care Chart of Accounts Classification Account Number Account Name ASSETS 101 Cash 110 Accounts Receivable 112 Allowance for Doubtful Accounts 115 Notes Receivable 116 Interest Receivable 120 Supplies 130 Prepaid Insurance 140 Inventory 150 Equipment 152 Land 153 Building 155 Accumulated Depreciation – Equipment 156 Accumulated Depreciation - Building LIABILITIES 201 Accounts Payable 220 Notes Payable 225 Interest Payable OWNER’S EQUITY 301 Owner’s Capital 305 Owner’s Drawings 310 Income Summary REVENUES 401 Lawn Service Revenue 410 Sales Revenue 415 Sales Returns and Allowances 420 Interest Income COST OF GOODS SOLD 501 Purchases 505 Purchase Returns and Allowances EXPENSES 620 Supplies Expense 630 Fuel Expense 640 Repair and Maintenance Expense 650 Advertising Expense 660 Insurance Expense 670 Depreciation Expense 680 Interest Expense 690 Bad Debt Expense 695 Miscellaneous Expense

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    Bill’s Lawn Care Module 5 Mini Practice Problem Bill’s Lawn Care Module 5 Mini Practice Problem In June, Bill made several purchases to accommodate his growing business. June 2 Bill purchased a storage location for lawn care equipment, paid $45,000 for a building on 1 acre. The land is appraised at $8,000. The building has an estimated life of 10 years with a $5,000 salvage value. Bill paid $2,000 down and financed the remaining purchase price with a 5% 5 year note. June 4 Bill purchased a trailer to haul lawn care equipment for $2,300; estimated life is 5 years with no salvage value. Bill paid for the purchase in cash. June 5 Bill purchased a gas powered trimmer for $1,200 and a commercial leaf-blower for $1,500. Bill estimates they will each have a two year life and no salvage value. Bill paid for both of these pieces of equipment on account. These are in addition to the three assets Bill acquired in May: Date Item Cost Estimated Life Salvage Value May 2 Truck $7,000 5 years $500 5 Lawn Mower $300 2 years $0 5 Aerator $500 2 years $0 Depreciation was recorded in May for these assets using the straight-line method however Bill is considering other depreciation methods and has asked you to prepare a comparison of the straight-line method with the double declining balance (200% DDB) method before he decides. Instructions: 1. Using the chart of accounts provided below and the Excel template provided with this assignment, record the transactions for the new assets purchased in June, 2014. Start with Page 7 for the journal entries. Explanations are optional. 2. Prepare a monthly schedule of depreciation for each of the seven assets for 2014 using 1) straight-line and 2) 200% DDB. (Assume assets purchased before the 15th of the month will be depreciated as if owned for the entire month). Remember that you are calculating monthly depreciation, not annual and adjust your depreciation rate. Carry your depreciation rate to four decimals and round the depreciation expense to two decimals. 3. Bill has decided that equipment will be depreciated using straight-line and the building using 200% DDB. Prepare the adjusting journal entries for depreciation for the month of June, 2014. Start with Page 8 for the adjusting journal entries. Explanations are optional. Bill’s Lawn Care Chart of Accounts Classification Account Number Account Name ASSETS 101 Cash 110 Accounts Receivable 112 Allowance for Doubtful Accounts 115 Notes Receivable 116 Interest Receivable 120 Supplies 130 Prepaid Insurance 140 Inventory 150 Equipment 152 Land 153 Building 155 Accumulated Depreciation – Equipment 156 Accumulated Depreciation - Building LIABILITIES 201 Accounts Payable 220 Notes Payable 225 Interest Payable OWNER’S EQUITY 301 Owner’s Capital 305 Owner’s Drawings 310 Income Summary REVENUES 401 Lawn Service Revenue 410 Sales Revenue 415 Sales Returns and Allowances 420 Interest Income COST OF GOODS SOLD 501 Purchases 505 Purchase Returns and Allowances EXPENSES 620 Supplies Expense 630 Fuel Expense 640 Repair and Maintenance Expense 650 Advertising Expense 660 Insurance Expense 670 Depreciation Expense 680 Interest Expense 690 Bad Debt Expense 695 Miscellaneous Expense

    Direitos autorais:

    © All Rights Reserved
    Baixe no formato DOCX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    162 visualizações3 páginas

    Module 5

    Enviado por

    Nidhi
    Bill’s Lawn Care Module 5 Mini Practice Problem Bill’s Lawn Care Module 5 Mini Practice Problem In June, Bill made several purchases to accommodate his growing business. June 2 Bill purchased a storage location for lawn care equipment, paid $45,000 for a building on 1 acre. The land is appraised at $8,000. The building has an estimated life of 10 years with a $5,000 salvage value. Bill paid $2,000 down and financed the remaining purchase price with a 5% 5 year note. June 4 Bill purchased a trailer to haul lawn care equipment for $2,300; estimated life is 5 years with no salvage value. Bill paid for the purchase in cash. June 5 Bill purchased a gas powered trimmer for $1,200 and a commercial leaf-blower for $1,500. Bill estimates they will each have a two year life and no salvage value. Bill paid for both of these pieces of equipment on account. These are in addition to the three assets Bill acquired in May: Date Item Cost Estimated Life Salvage Value May 2 Truck $7,000 5 years $500 5 Lawn Mower $300 2 years $0 5 Aerator $500 2 years $0 Depreciation was recorded in May for these assets using the straight-line method however Bill is considering other depreciation methods and has asked you to prepare a comparison of the straight-line method with the double declining balance (200% DDB) method before he decides. Instructions: 1. Using the chart of accounts provided below and the Excel template provided with this assignment, record the transactions for the new assets purchased in June, 2014. Start with Page 7 for the journal entries. Explanations are optional. 2. Prepare a monthly schedule of depreciation for each of the seven assets for 2014 using 1) straight-line and 2) 200% DDB. (Assume assets purchased before the 15th of the month will be depreciated as if owned for the entire month). Remember that you are calculating monthly depreciation, not annual and adjust your depreciation rate. Carry your depreciation rate to four decimals and round the depreciation expense to two decimals. 3. Bill has decided that equipment will be depreciated using straight-line and the building using 200% DDB. Prepare the adjusting journal entries for depreciation for the month of June, 2014. Start with Page 8 for the adjusting journal entries. Explanations are optional. Bill’s Lawn Care Chart of Accounts Classification Account Number Account Name ASSETS 101 Cash 110 Accounts Receivable 112 Allowance for Doubtful Accounts 115 Notes Receivable 116 Interest Receivable 120 Supplies 130 Prepaid Insurance 140 Inventory 150 Equipment 152 Land 153 Building 155 Accumulated Depreciation – Equipment 156 Accumulated Depreciation - Building LIABILITIES 201 Accounts Payable 220 Notes Payable 225 Interest Payable OWNER’S EQUITY 301 Owner’s Capital 305 Owner’s Drawings 310 Income Summary REVENUES 401 Lawn Service Revenue 410 Sales Revenue 415 Sales Returns and Allowances 420 Interest Income COST OF GOODS SOLD 501 Purchases 505 Purchase Returns and Allowances EXPENSES 620 Supplies Expense 630 Fuel Expense 640 Repair and Maintenance Expense 650 Advertising Expense 660 Insurance Expense 670 Depreciation Expense 680 Interest Expense 690 Bad Debt Expense 695 Miscellaneous Expense

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    © All Rights Reserved
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    Sinalizar o conteúdo como inadequado
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    Bills Lawn Care Module 5 Mini Practice Problem
    Bills Lawn Care Module 5 Mini Practice Problem
    In June, Bill made several purchases to accommodate his growing
    business.
    June 2 Bill purchased a storage location for lawn care equipment, paid
    $45,000 for a building on 1 acre. The land is appraised at $8,000. The
    building has an estimated life of 10 years with a $5,000 salvage value. Bill
    paid $2,000 down and financed the remaining purchase price with a 5% 5
    year note.
    June 4 Bill purchased a trailer to haul lawn care equipment for $2,300;
    estimated life is 5 years with no salvage value. Bill paid for the purchase in
    cash.
    June 5 Bill purchased a gas powered trimmer for $1,200 and a commercial
    leaf-blower for $1,500. Bill estimates they will each have a two year life
    and no salvage value. Bill paid for both of these pieces of equipment on
    account.
    These are in addition to the three assets Bill acquired in May:
    Date Item Cost Estimated Life Salvage Value
    May 2 Truck $7,000 5 years $500
    5 Lawn Mower $300 2 years $0
    5 Aerator $500 2 years $0
    Depreciation was recorded in May for these assets using the straight-line
    method however Bill is considering other depreciation methods and has
    asked you to prepare a comparison of the straight-line method with the
    double declining balance (200% DDB) method before he decides.
    Instructions:
    1. Using the chart of accounts provided below and the Excel template
    provided with this assignment, record the transactions for the new assets
    purchased in June, 2014. Start with Page 7 for the journal
    entries. Explanations are optional.
    2. Prepare a monthly schedule of depreciation for each of the seven
    assets for 2014 using 1) straight-line and 2) 200% DDB. (Assume assets
    purchased before the 15th of the month will be depreciated as if owned for
    the entire month). Remember that you are calculating monthly
    depreciation, not annual and adjust your depreciation rate. Carry your
    depreciation rate to four decimals and round the depreciation expense to
    two decimals.
    3. Bill has decided that equipment will be depreciated using straight-line
    and the building using 200% DDB. Prepare the adjusting journal entries for
    depreciation for the month of June, 2014. Start with Page 8 for the
    adjusting journal entries. Explanations are optional.

    Bills Lawn Care


    Chart of Accounts
    Classification
    Account Number
    Account Name
    ASSETS
    101
    Cash
    110
    Accounts Receivable
    112
    Allowance for Doubtful Accounts
    115
    Notes Receivable
    116
    Interest Receivable
    120
    Supplies
    130
    Prepaid Insurance
    140
    Inventory
    150
    Equipment
    152
    Land
    153
    Building
    155
    Accumulated Depreciation Equipment
    156
    Accumulated Depreciation - Building
    LIABILITIES
    201
    Accounts Payable
    220
    Notes Payable
    225
    Interest Payable
    OWNERS EQUITY
    301
    Owners Capital
    305
    Owners Drawings
    310
    Income Summary
    REVENUES
    401
    Lawn Service Revenue
    410
    Sales Revenue
    415
    Sales Returns and Allowances
    420
    Interest Income
    COST OF GOODS SOLD
    501
    Purchases
    505
    Purchase Returns and Allowances
    EXPENSES
    620
    Supplies Expense
    630
    Fuel Expense
    640
    Repair and Maintenance Expense
    650
    Advertising Expense
    660
    Insurance Expense
    670
    Depreciation Expense
    680
    Interest Expense
    690
    Bad Debt Expense
    695
    Miscellaneous Expense

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