Accounting

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4.3-44    Prepare a bank reconciliation using Bobby Barnacles’ Restaurant Supply Inc’s information for August 31.

 

·       A NSF check from Johnny Jones for $3,164.

·       Two deposits made on August 31 were not on the bank statement, totaling $2,897.

·       The bank collected an EFT payment for Rent for $2,600.

·       August 31 balance in Cash was $1,905.

·       The owner had written check # 1598 for $500 and recorded this check as $5,000.

·       The balance on the bank statement as of August 31 was $5,216.

·       Bank service charge of $28 was shown on the bank statement.

·       Checks #1572, 1606, 1116, and 1242 for $419, $126, $650, and $1,105, respectively, were not shown on the bank statement, even though the company had sent the checks.

      

Account                              Balance 
Money Market Account          $5,200 
Unearned Revenue                $4,400
Sales                                  $18,100 
Building                               $26,800 
Bonds payable                      $5,500 
Preferred Stock                     $5,100 
Prepaid insurance                  $4,100 
Rent expense                        $2,100 
Notes receivable                    $6,600
Depreciation expense              $2,700
Retained earnings                   $22,600
Salary Payable                       $8,200
Long term investments             $16,400

Prepare the company’s trial balance as of June 30, 2014, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts Receivable comes before Building. List the expense with the largest balance first, the expense with the next largest balance second, and so on.

      

A)        Net income for 2011 will be $1,200 higher than 2010.

B)        Net income for 2011 will be $1,200 lower than 2010.

C)        Net income for 2011 will be $10,200.

D)        Net income for 2011 cannot be calculated with the information given.

Please show the computations to support your answer.

      

 

 

 

DDB

Gross Profit

400,000

Operating expenses

180,000

Income before depreciation and taxes

220,000

Depreciation

84,000

Income before taxes

136,000

Taxes  (35%)

47,600

Net Income

88,400

Martin Motors realized at the beginning of 1012 that the machine would last an additional 8 years.  Martin Motors uses the DDB method.

 Prepare the appropriate journal entry to record the depreciation expense for 2012