Solutions For Depreciation, Accounting Entries, And Inventory Cost Calculation

Cost Of Machine Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	680,000
Life of Machine	6 years
Residual Value Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	50,000

Depreciation for year ending	Amount
Jun-16	52,500
Jun-17	1,05,000
Jun-18	1,05,000
Jun-19	1,05,000
Jun-20	1,05,000

Diminishing Balance Method
Depreciation rate per year	=	1-(Estimated Scrap/Original Value)^(1/Life of the asset)
	=	1-(50000/680000)^(1/6)
	=	0.35

Depreciation for year ending	Opening Value	Depreciation	WDV
Jun-16	6,80,000	1,19,000	5,61,000
Jun-17	5,61,000	1,96,350	3,64,650
Jun-18	3,64,650	1,27,628	2,37,023
Jun-19	2,37,023	82,958	1,54,065
Jun-20	1,54,065	53,923	1,00,142

Date	Particulars	Debit Amount	Credit Amount
Dec-01	Hairdressing Equipment ……….dr	57,000
	To Deposit for Hairdressing Equipment		5,000
	To Creditor for Hairdressing Equipment		52,000
	(Being Hairdressing equipment purchased with $5000 as deposit and $52000 payable in 60 days)
Dec-03	H. Horton Drawings ……….dr	1,400
	To Cash at Bank		1,400
	(Being Drawn for personal use)
Dec-08	Salaries Expense ……….dr	7,200
	To Cash at Bank		7,200
	(Being Salary expenses paid)
Dec-14	Capital and Advertising Expense……….dr	600
	To Cash at Bank		600
	(Being Advertisement expenses incurred and paid)
Dec-19	Cash at Bank ……….dr	830
	To Accounts Receivable		830
	(Being balance received from customers)
Dec-23	Accounts Payable ……….dr	2,400
	To Cash at Bank		2,400
	(Being payment made for supplies purchased on credit)
Dec-27	Cash at Bank ……….dr	85,000
	To H. Horton Capital		85,000
	(Being inheritance received which is to be used in business)
Dec-30	Cash at Bank ……….dr	46,080
	Accounts Receivable……….dr	11,520
	To Lesson Revenue		57,600
	(Being Lesson revenue earned of which $ 11520 is to be received in a month)

Accounts Payable
Particulars	Amount	Particulars	Amount
To Cash at Bank	2,400	By Bal c/d	2,400
	2,400		2,400
Accounts Receivable
Particulars	Amount	Particulars	Amount
To Lesson Revenue	11,520	By Cash at Bank	830
		By Bal c/d	10,690
	11,520		11,520
Capital and Advertising Expense
Particulars	Amount	Particulars	Amount
To Cash at Bank	600	By Bal c/d	600
	600		600
Cash at Bank
Particulars	Amount	Particulars	Amount
To Accounts Receivable	830	By H. Horton Drawings	1,400
To H. Horton Capital	85,000	By Salaries Expense	7,200
To Lesson Revenue	46,080	By Capital and Advertising Expense	600
		By Accounts Payable	2400
		By Bal c/d	1,20,310
	1,31,910		11,600
Creditor for Hairdressing Equipment
Particulars	Amount	Particulars	Amount
To Bal c/d	52,000	By Hairdressing Equipment	52,000
	52,000		52,000
Deposit for Hairdressing Equipment
Particulars	Amount	Particulars	Amount
To Bal c/d	5,000	By Hairdressing Equipment	5,000
	5,000		5,000
H. Horton Capital
Particulars	Amount	Particulars	Amount
To bal c/d	85,000	By Cash at Bank	85,000
	85,000		85,000
H. Horton Drawings
Particulars	Amount	Particulars	Amount
To Cash at Bank	1,400	By Bal c/d	1,400
	1,400		1,400
Hairdressing Equipment
Particulars	Amount	Particulars	Amount
To Deposit for Hairdressing Equipment	5,000	By Bal c/d	57,000
To Creditor for Hairdressing Equipment	52,000
	57,000		57,000
Lesson Revenue
Particulars	Amount	Particulars	Amount
To bal c/d	57,600	By Cash at Bank	46,080
		By Accounts Receivable	11,520
	57,600		57,600
Salaries Expense
Particulars	Amount	Particulars	Amount
To Cash at Bank	7,200	By Bal c/d	7,200
	7,200		7,200

Cost Of Sales

1,694.70

Cost Of Sales

1,620.00

References

Bragg, S n.d., Closing the books, 1st edn.

Harrison, W, Horngren, C & Thomas, C 2015, Financial accounting, 1st edn, Pearson, Boston.

Ittelson, T n.d., Financial statements, 1st edn.

Libby, R, Libby, P & Hodge, F n.d., Financial accounting, 1st edn.

Loughran, M 2011, Financial Accounting for Dummies, 1st edn.

May, G 2011, The encyclopedia of journal entries, 1st edn, AIPB, Rockville, MD.

Picker, R 2010, Australian accounting standards, 1st edn, John Wiley & Sons Australia, Ltd, Milton, Qld.

Piper, M 2015, Accounting made simple, 1st edn, [CreateSpace Pub.], [United States].

Rahman, A n.d., The Australian Accounting Standards Review Board, 1st edn.

SPEEDY PUBLISHING LLC., 2014, ACCOUNTING JOURNAL, SINGLE ENTRY LEDGER, 1st edn, SPEEDY PUBLISHING LLC, [S.l.].

Spiceland, J, Thomas, W & Herrmann, D 2014, Financial accounting, 1st edn, McGraw-Hill, New York, NY.

Weygandt, J, Kimmel, P & Kieso, D n.d., Financial accounting, 1st edn.

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