Prepare Adjusting Entries for the Following Transactions

question 44

Essay

Prepare adjusting entries for the following transactions. Omit explanations.
1. Depreciation on equipment is $600 for the accounting period.
2. There was no beginning balance of supplies and purchased $600 of supplies during the period. At the end of the period $150 of supplies were on hand.
3. Prepaid rent had a $1200 normal balance prior to adjustment. By year end $400 was unexpired.

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Definitions:

Scrap Value

The estimated resale value of an asset at the end of its useful life, often considered in depreciation calculations.

Salvage Value

The expected market value an asset will achieve when it is disposed of after its life cycle.

Payback Period

The length of time it takes for an investment to recover its initial cost out of the cash inflows that it generates.

Simple Rate of Return

A method of investment appraisal that calculates the annual incremental net operating income as a percentage of the initial investment.