TRANSACTION ANALYSIS: Jensen Corp. is a biopharmaceutical company that develops
ID: 2464660 • Letter: T
Question
TRANSACTION ANALYSIS: Jensen Corp. is a biopharmaceutical company that develops and commercializes products targeting the extracellular matrix for the endocrinology, dermatology, and drug delivery markets.
Transaction 1A – January 1, Y3: On January 1, Y3 Jensen Corp. purchased a lab vacuum pump for $30,000 on account. The estimated residual value was $10,000 and the estimated useful life was five years. Jensen Company depreciates equipment using the straight-line method. Give the journal entry for the purchase of the equipment.
Q17. Indicate the account title to be debited by $30,000.
A. Acct Receivable B. Acct Payable C. Cash D. Equipment E. Cost of Sales
Q18. Indicate the account title to be credited by $30,000.
A. Acct Receivable B. Acct Payable C. Cash D. Equipment E. Cost of Sales Revenue
Transaction 1B – December 31, Y3: Give the adjusting entry that was made at the end of Y3 for the depreciation on the equipment.
Q19. Compute the depreciation expense (straight-line method).
A. $10,000 B. $6,000 C. $4,000 D. $2,000
Q20. Indicate the account title to be debited by the above amount.
A. Acct Payable B. Accumulated Depreciation (Equipment) C. Depreciation Expense
D. Cash E. Equipment
Q21. Indicate the account title to be credited by the above amount.
A. Acct Payable B. Accumulated Depreciation (Equipment) C. Depreciation Expense
D. Cash E. Equipment
Explanation / Answer
Q.17 Debit Equipment $ 30,000 Option D
Q.18 Credit Acct. Payable $ 30,000 Option B
Q.19 Depreciation expense ( 30,000-10,000)/5 = $ 4,000 Option C
Q.20 Debit Depreciation Expense $ 4,000 Option C
Q.21 Credit Accumulated Depreciation (Equipment) $4,000 Option B
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.