Date Account title Debit Credit

July 1 Cash 20,000

Ordinary share 20,000

July 1 Truck 12,000
Cash 4000
A/P 8000
July 3 Supply 2100

A/P 2100
July 5 Prepaid insurance 1800

cash 1800
July 12 A/R 4500

Service revenue 4500

July 18 A/P 1500
Cash 1500
A/P 1400

Cash 1400
July 20 Salary expense 2800

Cash 2800
July 21 Cash 3400

A/R 3400
July 25 A/R 6000

Service revenue 6000

July 31 Gasoline expense 350

cash 350
July 31 Dividend 5600

Cash 5600
 Shou florist
Bank reconciliation
November 30,2020
Cash balance per bank statement ……………………………………………………….19239
Add deposit and transit………………………………………………………………………1690.40
total 20929.5
Less outstanding check
Check no 3478………………………………………………………..621.30
3481…………………………………………………………807.40
3484…………………………………………………………798.00
3486………………………………………………………… 889.50
3470…………………………………………………………720.10
3474………………………………………………………….1050
Total 4886.3
Adjusted balance cash at bank…………………………………………………………………………16043.2

Cash balance per

book…………………………………………………………………………………………………13985.20
Add electronic fund transfer………………………………………………………………2242

Total…………………………………………………………………………………………………16227.2

Less service charge………………………………………………………………………85

Error made by depositor

Check no 3485 was stated as 450.80,

the correct number is 540.80………………………………………………..90
540.80-480.80=90
the cash receipt 2945.00 was wrongly stated as2954.00…………………9
2954.00-2945.00=9
Total ……………………………………………………………………………………………………..184

Adjusted cash balance per book…………………………………………………………………..16043.2

Part 4 accounting for plant , property
Machine A ;-
o Cash price= 35,000
o Sales tax=2200
o Shipping=150
o Insurance during shipping=80
o Installment and test cost=70
o Oil& lubricant=100
o Use full life= 5 years
o Residual value=5000
Machine A Machine B
Cash price= 35,000 Use full life=4 years
Sales tax=2200 Residual value=5000
Shipping=150
Insurance during shipping= 80
Installment and test cost=70
Oil& lubricant=100
Use full life=5 years
Residual value=5000

A,Prepare the following for machine “A”

1,The journal entry to record its purchase on jan 1,2020

Cash price…………………………………………….35000
Shipping………………………………………………..2200
Insurance………………………………………………150
Installment……………………………………………..70
Oil and lubricant…………………………………….100
Total 37,600
machinery………………………………..37,600
cash…………………………….37,600
2, The journal entry to record annual depreciation at Dec31,2020
Annual depreciation= depreciation cost = 37,600-500 = 6,520
Estimated use full life 5 yrs.
Depreciation expense………………………………………………………….6520
Accumulateddepreciation………………………………………
…..6520
B. Calculate the amount of depreciation expense that Pele should record for machine B
each year for its use full life under the following assumption
1) Pele uses the straight line method;-
Machine B = cost of machine =80,000
Use full life= 4 yrs
Residual value= 5000
Annual depreciation= depreciation/estimated useful life = 80,000-5000/4 yrs
Depreciation expense………………………………….18750
Accumulated depreciation……………………………..18750
no Annual Accumulated Carrying value
depreciation depreciation
1 18,750 18,750 61,250
2 37500 42,500
3 56250 23,750
4 75,000 5000

2. Pele uses the declining -balance method. The rate used is twice the straight line rate.
Rate =100% *2= (100/4)*2= 50%
EL
Depreciation=carrying value x rate
year Carrying Rate Annual Accumulated dep Ending carrying
value deprecation value
1 80,000 50% 40,000 40,000 40,000
2 40,000 50% 20,000 60,000 20,00
3 20,000 50% 10,000 70,000 10,000
4 10,000 50% 5000 75,000 5000

1st year= depreciation expense ………………40,000

 Accumulated dep………………………..40,000
2nd year = depreciation expense………………………….20, 000
Accumulated dep……………………………..20,000

3. Pele uses the units of activity method and estimate that the useful life of the machine is
125,000units.
Depreciation rate=depreciation value =80,000-5000 =0.6
Total estimated unit 125,000

year Beginning rate Annual Accumulate Ending carrying

carrying dep dep value
value
1 42,000 0.6 25,200 25,000 54,800
2 37,000 0.6 22,200 47,000 32,600
3 28,000 0.6 16,800 64,200 15,800
4 18,000 0.6 10,800 75,000 5000

1st year depreciation expense …………………25,200

Accumulated dep ………………………………25,500
2nd year depreciation expense ……………………22,200
Accumulated dep……………………………….22, 200
C, in year1, (2020) =declining balance method report the highest amount of depreciation
expense
In year4, (2024) =all the 3 method report the same amount of depreciation expense
The higher amount over the 4 year period is 75, 000