Accounting: Brainiac Company Sample Essay

E9-7 Brainiac Company purchased a bringing truck for $ 30. 000 on January 1. 2011. The truck has an expected salvage value of $ 2. 000. and is expected to be driven 100. 000 stat mis over its estimated utile life of 8 old ages. Actual stat mis driven were 15. 000 in 2011 and 12. 000 in 2012. Instruction manuals

( a ) Compute depreciation disbursal for 2011 and 2012 utilizing ( 1 ) the straight-line method. ( 2 ) the units-of-activity method. and ( 3 ) the double-declining balance method. ( B ) Assume that Brainiac uses the straight-line method.

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( 1 ) Fix the journal entry to enter 2011 depreciation.
( 2 ) Show how the truck would be reported in the December 31. 2011. balance sheet. Straight-line depreciation rate ( $ 30. 000 – $ 2. 000 ) / 8 old ages = $ 3. 500 per twelvemonth Straight-line depreciation for 2010 $ 3. 500

Straight-line depreciation for 2011 $ 3. 500
Units-of-Activity depreciation rate ( $ 30. 000 – $ 2. 000 ) / 100. 000 stat mis = $ . 28 per stat mi Units-of-Activity depreciation for 2010 $ 4. 200 ( 15. 000 stat mis x $ . 28 per stat mi ) Units-of-Activity depreciation for 2011 $ 3. 360 ( 12. 000 stat mis x $ . 28 per stat mi ) Double worsening balance depreciation rate ( 1 / 8 ) x 2 = 25 % Double worsening balance depreciation for 2010 $ 7. 500 ( $ 30. 000 * 25 % ) Double worsening balance depreciation for 2011 $ 5. 625 [ ( $ 30. 000 – $ 7. 500 ) x 25 % ] ( 1 )

Debit Depreciation Expense $ 3. 500
Recognition Accumulated Depreciation – Delivery Truck $ 3. 500
( 2 )
Brainiac Company
Partial Balance Sheet
December 31. 2010
Assetss
Property. Plant and Equipment
Delivery Truck $ 30. 000
Less Accumulated Depreciation $ 3. 500
Book Value $ 26. 500

E10-5 Don Walls’s gross net incomes for the hebdomad were $ 1. 780. his federal income revenue enhancement withholding was $ 301. 63. and his FICA sum was $ 135. 73.
Instruction manuals
( a ) What was Walls’s net wage for the hebdomad?
( B ) Journalize the entry for the recording of his wage in the general diary. ( Note: Use Salaries Payable ; non Cash. )
( degree Celsius ) Record the issue of the cheque for Walls’s wage in the general diary. a. Gross – revenue enhancements = Net wage
1780 – 301. 63 -135. 73 = $ 1342. 64
B. Wages Expense1780
FICA Payable135. 73
Fed. Income Tax Withholding Payable301. 63
Wages Payable1342. 64
c. Salaries Payable1342. 64
Cash1342. 64