#7 The King Street Zoo operates a drive-through tourist attraction in Toronto. T
ID: 2394236 • Letter: #
Question
#7
The King Street Zoo operates a drive-through tourist attraction in Toronto. The company adjusts its
accounts at the end of each month. The selected accounts appearing below reflect balances after
adjusting entries were prepared on April 30. The adjusted trial balance shows the following:
Prepaid Rent
$12,000
Feed Shed
$40,000
Accumulated Depreciation – Feed Shed
$6,000
Unearned Revenue
$500
Other data:
1. 4 months rent had been prepared on April 1.
2. The Feed Shed is being depreciated at $7,200 per year.
3. The unearned revenue represents tickets sold for future zoo visits. The tickets sold were at $4.00 each on April 1. During April, 25 of the tickets were used by customers
Instructions
Calculate the following:
The age of the Feed Shed in months:
The King Street Zoo operates a drive-through tourist attraction in Toronto. The company adjusts its
accounts at the end of each month. The selected accounts appearing below reflect balances after
adjusting entries were prepared on April 30. The adjusted trial balance shows the following:
Prepaid Rent
$12,000
Feed Shed
$40,000
Accumulated Depreciation – Feed Shed
$6,000
Unearned Revenue
$500
Other data:
1. 4 months rent had been prepared on April 1.
2. The Feed Shed is being depreciated at $7,200 per year.
3. The unearned revenue represents tickets sold for future zoo visits. The tickets sold were at $4.00 each on April 1. During April, 25 of the tickets were used by customers
Instructions
Calculate the following:
The age of the Feed Shed in months:
Explanation / Answer
If we divide the anuual depreciation of $7200 by 12 month, per month depreciation expense of feed shed comes out to $600. In the given question, the balance of accumulated depreciation account shows that depreciation of $6000 has been charged that means depreciation for 10 months has been absorbed ($6000/$600 per month) = 10 month.
Hence the feed shed is 10months old.
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