midterm-2 - 36. Prepare journal entries for the following...

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36. Prepare journal entries for the following (a) November 1, 2005 Purchased machinery for $77,000 with a $5,000 residual value and a six year life by paying $24,000 down and the balance with a Note Payable. (b) December 31, 2005 Record the adjusting entry for depreciation using the straight line method to the nearest month (no entry was done in Nov.) (c ) July 1, 2006 Sold the equipment for $66,000 cash and paid off the Note payable. (a) Machinery………………………… $77,000 Cash………………………………………. . $24,000 Notes Payable…………………………. $53,000 (b) Depreciation Expense……… $2,000 Accumulated Depreciation……. $2,000 (c ) Cash…………………………………. $66,000 Loss on sale of asset………… $3,000 Accumulated Depreciation $8,000 Machinery……………………………. . $77,000 37. Gross profit method Aurora Company had sales of $1,750,000 during the current period and a gross profit rate of 35%. The company's cost of goods available for sale during the period was $1,400,000. The company's ending inventory must have amounted to $_______________.
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COGS available for sale……….………………… $1,400,000 Net Sales………………………. . $1,750,000 Cost ratio ( 100% - 35%). . 65% Est. COGS sold………………………………………. . $1,137,500 Estimated ending inventory…………………… $ 262,500 The company's ending inventory must have amounted to $262,500. 38. Depreciation in financial statements Ming Tea Co. uses straight-line depreciation in its financial statements, with depreciation for a partial year rounded to the nearest full month. On September 28, 2000, Ming Tea purchased equipment at a cost of $110,000. For
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midterm-2 - 36. Prepare journal entries for the following...

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