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WhatsApp Image 2019-07-29 at 5.03.33 PM (5).jpeg - Chapter...

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Unformatted text preview: Chapter 04 - Adjustments, Financial Statements, and the Quality of Earnings HANDOUT 4 - 1, continued (d) The company had acquired equipment costing $40,000 on January 1 of the current year. Suppose that the depreciation on this equipment was calculated to be $2,000 for the current year. Debit and credit the accounts affected Depreciation Expense (+ E-SE ) 2,000 Accumulated Depreciation (-A) 2,000 Ensure the equation still balances and debits = credits. Assets Liabilities + Stockholders Equity (e) On December 1 of the current year, the company had sold $500 in gift certificates for decorating services to a customer. On December 31 of the current year, the accountant received an envelope containing $400 worth of redeemed gift certificates, not yet recorded in the company's books. Debit and credit the accounts affected. Dec. 31 Unearned Revenue 400 Decorating Revenue 400 Ensure the equation still balances and debits = credits. Assets Liabilities + Stockholders' Equity (f) Investments owned by the company earned $1,200 in additional interest revenue for the year; the cash will be received in January. Debit and credit the accounts affected. Dec. 31 Heeslats Receivable 1, 200 Interest Revenue 1,200 Ensure the equation still balances and debits = credits. Assets Liabilities + Stockholders' Equity Are aft revenues credited? 4-3 O 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part...
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  • Fall '12
  • MayYueZhang
  • Depreciation, Generally Accepted Accounting Principles, Double-entry bookkeeping system, Heeslats Receivable

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