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Practice Problems

Demonstration problem

Solution to demonstration problems

Date Account Titles and Explanation Post.
Ref.		 Debit Credit
2010 Dec. 31 Supplies Expense 3 6 0 0
Supplies on Hand
3 6 0 0
To record supplies expense ($6,000 - $2,400).

31 Rent Expense
 1
 6 8
 0 0
Prepaid Rent
1 6 8 0 0
To record rent expense ($25,200 X 8/12).

31 Depreciation Expense – Buildings
4 7 5 0
Accumulated Deprecation – Buildings
4 7 5 0
To record depreciation ($200,000 - $10,000 / 40 years).

31 Salaries Expense
6 0 0 0
Salaries Payable
6 0 0 0
To record accrued salaries.

31 Unearned Delivery Fees
1 0 0 0
Service Revenue
1 0 0 0
To record delivery fees earned.

31 Accounts Receivable
6 0 0
Service Revenue
6 0 0
To record delivery fees earned.

Eight years; computed as:

\frac{\text { Total accumulated deprecation }}{\text { Annual deprecation expense }}=\frac{\text { USD } 33,250+\mathrm{USD} 4,750}{\operatorname{USD} 4,750}