Sam Nix owns Nix Estate Planning and Investments. The trial balance of the firm for June 30,

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Sam Nix owns Nix Estate Planning and Investments. The trial balance of the firm for June 30, 2019, the first month of operations, is shown below.

Sam Nix owns Nix Estate Planning and Investments. The trial

INSTRUCTIONS
1. Complete the worksheet for the month.
2. Prepare an income statement, statement of owner's equity, and balance sheet. No additional investments were made by the owner during the month.
3. Journalize and post the adjusting entries. Use 3 for the journal page number. Use the account numbers provided in Problem 5.4A.

Sam Nix owns Nix Estate Planning and Investments. The trial

End-of-month adjustments must account for the following:
a. The supplies were purchased on June 1, 2019; inventory of supplies on June 30, 2019, showed a value of $6,000.
b. The prepaid advertising contract was signed on June 1, 2019, and covers a four-month period.
c. Rent of $6,000 expired during the month.
d. Depreciation is computed using the straight-line method. The equipment has an estimated useful life of five years with no salvage value.
Analyze: Why are the costs that reduce the value of equipment not directly posted to the asset account Equipment?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Related Book For  book-img-for-question

College Accounting A Contemporary Approach

ISBN: 978-0077639730

4th edition

Authors: David Haddock, John Price, Michael Farina

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