1- Shamma Company’s ledger at the end of the current year shows Accounts Receivable of $120,000....

1- Shamma Company’s ledger at the end of the current year shows Accounts Receivable of $120,000. If Allowance for Doubtful Accounts has a credit balance of $6,000 in the trial balance and bad debts are expected to be 8% of accounts receivable, journalize the adjusting entry for the end of the period

2- ABC Company purchased a new machine on January 1, 2017, at a cost of $220,000. The machine is expected to have 10 -year term life and a $20,000 salvage (Residual) value. The machine is expected to work 800,000 hours during its 10-year term life. Working during 2017 was 70,000 hours and during 2018 was 110,000 hours and during 2019 was 120,000 hours. Instructions Prepare a depreciation schedule which shows the annual depreciation expense on the machine for the years 2017, 2018, and 2019 under each of the following methods: 1) Units of production

Solutions

Expert Solution

1. If there is already a credit balance existing in the allowance of doubtful accounts, then we only need to adjust it.

2. Units of production method
The unit of production method is a method of depreciation of the value of an asset over time. It becomes useful when an asset's value is more closely related to the number of units it produces than the number of years it is in use.

ekkarill92 answered 1 year ago

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