Question 1: Giolito Company sells equipment on June 30, 2023, for $30,000 cash.
The
equipment originally cost $90,000 and as of January 1, 2023, had accumulated depreciation
of $15,000.
a. Prepare the journal entries to update depreciation to June 30, 2023
Sell equipment: $30,000
Originally cost: $90,000
Accumulated depreciation: $45,000 (1/1)
Depreciation ( 1/6): $4,500
Debit Credit
Depreciation expense: $4,500
Acculumated depreciation 4,500
Depreciation for the first 6 months of 2023: $4,500
Acculumated depreciation as of jan 1, 2023: $45,000
Updated acculumated depreciation = Previous depreciation + 6 months’s depreciation =
$45,000+$4,500=$49,500
b/ How much is gain on disposal? You should prepare calculation as following table:
Result
Items Function
($)
Value of Equipment Originally cost 90,000
Accumulated
Updated acculumated depreciation 49,500
Depreciation
Book value at date of Book value = Value of Equipment -
40,500
disposal Accumulated Depreciation
Proceeds from sale Cash 30,000
Gain on disposal = Proceeds from sale - -
Gain on disposal
Book value at date of disposal 10,500
The company involved a loss of $10,500 on the disposal
Question 2: The adjusted trial balance columns of Asia Company's work sheet for the year
ended December 31, 2023, are as follows:
Account Debit Credit
Accumulated
Cash 58,800 18,000
depreciation
Accounts Receivable 10,000 Notes payable 12,700
Inventory 50,000 Accounts payable 10,600
Prepaid Insurance 2,500 Owner’s capital 81,000
Equipment 95,000 Sales revenue 600,000
Owner's Drawings 12,000
Sales Discounts 6,000
Cost of Goods Sold 350,000
Freight-Out 7,000
Advertising Expense 10,000
Salaries and Wages Expense 70,000
Utilities Expense 12,000
Rent Expense 30,000
Depreciation Expense 9,000
Total 722,300 722,300
a. Prepare an income statement for Asia Company as the following table:
Value Value
Items Items
($) ($)
Sales revenue 600,000 Salaries and Wages
70,000
Expense
Sales Discounts 6,000
Utilities Expense 12,000
Net sales 594,000
Rent Expense 30,000
Cost of Goods Sold 350,000
Depreciation Expense 9,000
Gross profit
Earnings before tax 106,000
Freight-Out 7,000
Tax (20%) 21,200
Advertising Expense 10,000
Earnings after tax 84,800
Mục Công thức
Doanh thu ròng (Net
Net Sales = Sales Revenue - Sales Discounts
Sales)
Lợi nhuận gộp
Gross Profit = Net Sales - Cost of Goods Sold
(Gross Profit)
Total Expenses = Freight-Out + Advertising Expense +
Tổng chi phí (Total
Salaries and Wages Expense + Utilities Expense + Rent
Expenses)
Expense + Depreciation Expense
Lợi nhuận trước thuế
(Earnings Before Earnings Before Tax = Gross Profit - Total Expenses
Tax)
Thuế (Tax) Tax = 0.2 x Earnings Before Tax
Lợi nhuận sau thuế
Earnings After Tax = Earnings Before Tax - Tax
(Earnings After Tax)
Giá trị ròng thiết bị
Net Value = Giá trị thiết bị ban đầu - Tổng khấu hao
(Net Value)
b/ How much is net value of equipment at the end of December 31, 2023?
Net value of equipment = cost of euqipment – acculumated depreciation = $95,000-$18,000=
$73,000
(at the end of Dec 31, 2023)
