We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Accounting: Brainiac Company Essay Sample

essay
The whole doc is available only for registered users OPEN DOC

A limited time offer!

Get a custom sample essay written according to your requirements urgent 3h delivery guaranteed

Order Now

Accounting: Brainiac Company Essay Sample

E9-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011.The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years.Actual miles driven were 15,000 in 2011 and 12,000 in 2012. Instructions

(a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method. (b) Assume that Brainiac uses the straight-line method.

(1) Prepare the journal entry to record 2011 depreciation.
(2) Show how the truck would be reported in the December 31, 2011, balance sheet. Straight-line depreciation rate ($30,000 – $2,000) / 8 years = $3,500 per year Straight-line depreciation for 2010 $3,500

Straight-line depreciation for 2011 $3,500
Units-of-Activity depreciation rate ($30,000 – $2,000) / 100,000 miles = $.28 per mile Units-of-Activity depreciation for 2010 $4,200 (15,000 miles x $.28 per mile) Units-of-Activity depreciation for 2011 $3,360 (12,000 miles x $.28 per mile) Double declining balance depreciation rate (1 / 8) x 2 = 25% Double declining balance depreciation for 2010 $7,500 ($30,000 * 25%) Double declining balance depreciation for 2011 $5,625 [($30,000 – $7,500) x 25%] (1)

Debit Depreciation Expense $3,500
Credit Accumulated Depreciation – Delivery Truck $3,500
(2)
Brainiac Company
Partial Balance Sheet
December 31, 2010
Assets
Property, Plant and Equipment
Delivery Truck $30,000
Less Accumulated Depreciation $3,500
Book Value $26,500

E10-5 Don Walls’s gross earnings for the week were $1,780, his federal income tax withholding was $301.63, and his FICA total was $135.73.
Instructions
(a) What was Walls’s net pay for the week?
(b) Journalize the entry for the recording of his pay in the general journal. (Note: Use Salaries Payable; not Cash.)
(c) Record the issuing of the check for Walls’s pay in the general journal. a. Gross – taxes = Net pay
1780 – 301.63 -135.73 = $1342.64
b. Salaries Expense1780
FICA Payable135.73
Fed. Income Tax Withholding Payable301.63
Salaries Payable1342.64
c. Salaries Payable1342.64
Cash1342.64

We can write a custom essay

According to Your Specific Requirements

Order an essay
Get Access To The Full Essay
icon
300+
Materials Daily
icon
100,000+ Subjects
2000+ Topics
icon
Free Plagiarism
Checker
icon
All Materials
are Cataloged Well

Sorry, but copying text is forbidden on this website. If you need this or any other sample, we can send it to you via email.

By clicking "SEND", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
Sorry, but only registered users have full access

How about getting this access
immediately?

Become a member

Your Answer Is Very Helpful For Us
Thank You A Lot!

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?

Can't find What you were Looking for?

Get access to our huge, continuously updated knowledge base

The next update will be in:
14 : 59 : 59
Become a Member