a. If the amount in supplies expense represents the January 31 adjustment for th
ID: 2564595 • Letter: A
Question
a. If the amount in supplies expense represents the January 31 adjustment for the supplies used in January, and $1,860 worth of supplies were purchased during January, what was the January 1 beginning balance of supplies?
$Answer
b. The amount in the insurance expense account represents the adjustment made at January 31 for January insurance expense. If the original insurance premium was for one year, what was the amount of the premium, and on what date did the insurance policy start?
Amount of the premium $? Answer
The policy began on AnswerJune 1July 1August 1September 1October 1November 1 of the previous year. when?
c. If we assume that no beginning balance existed in either in either wage payable or wage expense on January 1, how much cash was paid as wages during January? $Answer ?
d. If the truck has a useful life of six years (or 72 months), what is the monthly amount of depreciation expense, and how many months has Bloomfield owned the truck?Answer ? months
?.1167% 3:16 PM Module 3 HW https://mybusinesscourse.com glenn vaca- Supplies Jan. 31 Bal. 2,700 Supplies Expense Jan. 31 Bal. 2,880 Prepaid Insurance Jan. 31 Bal. 1,722 Insurance Expense Jan. 31 Bal. 246 Wages Payable 2,100 Jan. 31 Bal Wages Expense Jan. 31 Bal. 9,600 Truck Jan. 31 21,456 Bal Accumulated Depreciation -Truck 5,960 Jan. 31 BalExplanation / Answer
Part a:
Supplies is something which is used in the day to day working of the business.
Explanation: The opening balance of the supplies would be=closing balance of supplies-purchased supplies+supplies used
Hence, putting figures in this formula, we get:
=2,700-1,860+2,880
=$3,720
Part b:
Explanation: As per the question, the insurance expense was for 1 year which is 12 months. Now, if this insurance expense is for 1 month (($246). Then we will have to multiply the same by 12 in order to get the premium for the whole year which would be as follows:
=$(246*12)
=$2,952
The policy started in October since the prepaid insurance contains the balance for 7 months ($246*7)=$1722. Hence, if we subtract $(2952-1722), we are left with $1230 which when divided by $246 gives us 5. This means that we are left with only 7 months of prepaid insurance. Hence, counting backwards from January by 5 months gives us October.
Part c:
The total wage expense for the period was $9,600 but out of this $2,100 are still unpaid. This means that the difference between the two would be the cash paid towards wages expense for the period.
Cash paid for wages=Wage expense-Wages payable
=$(9,600-2,100)
=$7,500
Part d:
Truck was purchased at $21,456 as the ledger account contains the stated balance. Now, if the truck has 6 years of life, then its yearly depreciation would =Cost of truck/Number of years of life.
=21,456/6
=$3,576
If calculated monthly, then $298 ($3,576/12).
The depreciation expense charged by the company is transferred to the Accumulated depreciation on yearly or monthly basis, hence the cumulative amount who’s the depreciation charged on the truck till date.
When we divide $5,960 which exists in the Accumulated depreciation account of the company, and divided the same by $298 which is the monthly depreciation expense for the company. We get 20.
This means =$5960/$298=20.
Hence, the company has owned the truck since 20 months.
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