Give the Required Adjusting Entry at December 31, 20F, the End

question 112

Essay

Give the required adjusting entry at December 31, 20F, the end of the annual accounting period for the three items below. If no entry is required, explain why.
A. Web Company acquired a patent that cost $4,260 on January 1, 20F. The patent was registered on January 1, 20A. The legal life of a patent is 17 years from registration. Web expects to use the patent the remaining legal life.
B. Web Company acquired a gravel pit on January 1, 20F, that cost $24,000. The company estimates that 30,000 tons of gravel can be extracted economically. During 20F 4,000 tons were extracted and sold.
C. On January 1, 20F, Web Company acquired a dump truck that cost $6,000 to use hauling gravel. The company estimated a residual value of 10% of cost and a useful life 4 years. The company uses straight-line depreciation.

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Definitions:

Adjusted Trial Balance

An adjusted trial balance is a list of all the accounts of a company, including any adjustments, showing the final balances to be used for preparing financial statements.

Income Statement

Financial statement that displays a company’s revenues and expenses, and ultimately its profit or loss, over a particular period, offering insight into its operational efficiency.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made for errors, accruals, and deferrals, used to verify the balance of debits and credits.

Insurance Policy

An insurance policy is a contract between an insurer and an insured, outlining the terms under which the insurer agrees to compensate the insured for specific losses.