Title: Year-End Journal Entries Using the business and closing entries usi helpe

Question

Title: Year-End Journal Entries Using the business and closing entries usi helped you to arrive at the solution. scenario and the adjustment data given below, complete the end-of-year adjusting ng the journal entry template. Ensure that you include detailed calculations that Land: 25 acres valued at $56,000, inherited, currently in Year Two. Warehouse: Built in 2012-started to use on 1/6/2012, basis $39,000, residual value 30-year life uses straight-line depreciation-currently in year three. Machinery: Straight line cost $22,000, $6,000 residual value, five-year life-purchased 10/1/2012, currently in year three. 2010 Truck:Cost $20,000, no residual value, four years, purchased and started using on 1/1/2014, currently in year two. · esidual value $10,000, Cost of Goods Sold 1. Blood Pressure Monitors: 2014 Annual sales of 250 units. Ending Inventory is 60 units. Units Unit Cost Total Cost $89,950 $29,325 $99,000 Beginning Inventory 257 350 Purchase 185 345529.235 Purchase 2 300 330 2. Ultrasound Scanners: 2014 Annual sales of 1,650 units. Ending Inventory is 1,350 Beginning Inventory 654 400 Purchase 1 Units Unit Cost Total Cost $261,600 $108,750 250 435 © ITT Educational Services, Inc. [22] 3/16/15 All Rights Reserved.

Explanation / Answer

The calculation of depreciation on warehouse using straight line method: Depreciation on warehouse (2014)=(Cost-Salvage value)/estimated no. of years    =($39,000-$10,000)/30    '=967 Calculation of depreciation on Machinery using straight line method Depreciation on Machinery=(Cost-salvage value)/Estimated No. of years                '=($22,000-$6,000)/5                 '=$3,200 Calculation of depreciation on Truck using straight line method Depreciation on Truck=(Cost-salvage value)/Estimated No. of years                '=($20,000-$0)/4                 '=$5,000 The calculation of cost of goods sold of Blood pressure monitors using Last in First out is as under: Sales in units 250 units Cost of goods sold @ $330/per unit of purchase 2:=(250units×$330)=$82,500 The calculation of cost of goods sold for Ultra sound scanners using last in first out method: 1650 units Sales in units 1650 units Cost of goods sold: 1000 units @ $400 per unit $      400,000 250 units @ $435 per unit $      108,750 400 units @ $400 per unit $      160,000 Cost of goods sold: $      668,750 The journal entries for the year 2014 are as under: The journal entry for depreciaton on Machinery: Depreciation expense-Machinery $3,200 Accumulated Depreciation $3,200 (Being depreciaiton on Machinery recorded for the year) The journal entry for depreciaton on Truck: Depreciation expense-Truck $5,000 Accumulated Depreciation $5,000 (Being depreciaiton on Truck recorded for the year) The journal entry for prepaid insurance is as under: Prepaid Insurance Insurance Account The journal entry to record to recognized unearned income: Unearned Income Income The journal entry for wages expenses due for $4,500 is as under: Wages expenses $           4,500 Wages payable $           4,500 (Being wages expenses due recorded) The journal entry for office supplies remaining $245: Supplies expenses Supplies account The journal entry for sales tax payable: Sales tax Sales tax payale The journal entry for interest payable: Interest expense Interest payable The journal entry for recording cost of goods sold: Cost of goods sold $         82,500 Finished Goods Inventory $         82,500 (Being cost of goods sold transferred of 250 units of blood pressure monitors) Cost of goods sold $      668,750 Finished Goods Inventory $      668,750 (Being cost of goods sold transferred of 1,650 units of Ultra sound scanners)

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