The following accounts were taken from the trial balance of Cristy Company as of December 31, 2008:

Question:

The following accounts were taken from the trial balance of Cristy Company as of

December 31, 2008:

Sales .................$90,000

Interest Revenue ............. 5,000

Equipment ............... 46,000

Accumulated Depreciation—Equipment ... 12,000

Inventory ................ 20,000

Advertising Expense ........... 2,000

Selling Expense ............. 6,000

Interest Expense .............. 1,000

Given the information below, make the necessary adjusting entries.

(a) The equipment has an estimated useful life of nine years and a salvage value of $1,000. Depreciation is calculated using the straight-line method.

(b) Of selling expense, $2,500 has been paid in advance.

(d) Of advertising expense, $620 was incorrectly debited to selling expense.

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...