Question

thomton company faced the following situations.
view the situations.
requirement

1. journalize the adjusting entry needed at december 31, 2023, for each situation. consider each fact separately. (record debits first, then credits. exclude explanations from any journal entries.)

d. salary expense is $6,500 per day—monday through friday—and the business pays employees each friday. this year, december 31 falls on a thursday.

e. the unadjusted balance of the supplies account is $3,300. the total cost of supplies on hand is $1,200.

f. equipment was purchased on january 1 of this year at a cost of $80,000. the equipments useful life is five years. there is no residual value. record depreciation for this year and then determine the equipments book value.

Explanation:

Step1: Calculate annual depreciation

Using straight - line depreciation formula: \(Depreciation\ per\ year=\frac{Cost - Residual\ Value}{Useful\ Life}\).
Here, \(Cost = 80000\), \(Residual\ Value = 0\), \(Useful\ Life=5\)
\(Depreciation\ per\ year=\frac{80000 - 0}{5}=16000\)

Step2: Record the adjusting entry

Debit Depreciation Expense (to recognize the expense for the year) and credit Accumulated Depreciation - Equipment (a contra - asset account).
The adjusting entry is:

Accounts	Debit	Credit
Accumulated Depreciation - Equipment		16000

Step3: Calculate book value

Book value formula: \(Book\ Value=Cost - Accumulated\ Depreciation\)
Since accumulated depreciation for one year is \(16000\) (from step 1) and cost is \(80000\)
\(Book\ Value = 80000-16000 = 64000\)

Answer:

The adjusting entry for depreciation:

Accounts	Debit	Credit
Accumulated Depreciation - Equipment		16000

The book value of the equipment is \(64000\)