Compute the Following: A

question 71

Essay

Compute the following:
a.
Lobo Company purchased equipment for $40,000 with a useful life of five years and no expected salvage value.Prepare the adjusting entry for the first year using the straight-line depreciation method and compute the book value at the end of the second year of the equipment's life.
b.
Zip Company pays its employees every Friday.On January 4,20--,the Company paid $2,200 for the 5 days beginning the previous December 31.Prepare the adjusting entry on December 31.

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Definitions:

Indirect Cost

A cost that cannot be easily and conveniently traced to a specified cost object.

Cost Of Goods Sold

The total cost directly associated with producing the goods sold by a company, including materials and labor.

Manufactured

Refers to the state of having been made from raw materials through a process of production in a factory.

Finished Goods Inventory

The stock of completed products ready for sale, held at the end of an accounting period.