Practice final BBUS3211_SW2_PE_10JUL12

3 ling bought a truckjanuary1 2009for 108000 with a

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Unformatted text preview: have prepared to adjust for them during 2012. If you think no entry was prepared, write “none.” Ignore income taxes. b. 1. After recording each situation in part (a) above, prepare the appropriate year‐end adjusting entry that should have been made at December 31, 2012. If you think no entry would be required, write “none.” Ignore income taxes. Early in 2012, Ling determined that equipment purchased in January 2010 for $124,000, with an estimated life of five years and residual value of $4,000, is now estimated to have a total seven year life (from the date of purchase), but will have only a $2,000 residual value. Ling is using straight‐line depreciation for this equipment. 2. Ling discovered that depreciation expense had been understated by $17,000 in 2011, owing to the fact that an adjusting entry for depreciation on machinery did not get recorded. 3. Ling bought a truck January 1, 2009 for $108,000 with a $12,000 estimated residual value and a six‐year life. At that time, the bookkeeper d...
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