Accounting

Pyrebavdhr
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Basic Accounts

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Credit $ 1.600 PIONEER ADVERTISING AGENCY INC. ADJUSTED TRIAL BALANCE OCTOBER 31, 2012 Debit Cash $ 80,000 Accounts Receivable 74,000 Allowance for Doubtful Accounts Supplies 10,000 Prepaid Insurance 5,500 Equipment 50,000 Accumulated Depreciation Equipment Notes Payable Accounts Payable Interest Payable Uneamed Service Revenue Salaries and Wages Payable Common Stock Dividends 5,000 Service Revenue Salaries and Wages Expense 46,000 Supplies Expense 15.000 Rent Expense 9,000 Insurance Expense 500 Interest Expense 500 Depreciation Expense 400 Bad Debt Expense 1.600 $297,500 400 50,000 25,000 500 8,000 6.000 100,000 106,000 $297,500 Instructions (Part A) 1). Prepare an income statement for the current year ended October 31, 2012. 2). Prepare a statement of owner's equity for the current year ended October 31, 2012. 3). Prepare a balance sheet as of October 31, 2012. 4). Statement of Financial Accounting Concepts No. 5 identifies four characteristics that an item must have before it is recognized in the financial statements. What are these four characteristics? (Part B) Jerry Corporation purchased a piece of equipment for $42,000. It estimated a 6 year life and $6,000 salvage value. Thus, straight-line depreciation was $5,000 per year [(S42,000 - $6,000) = 6]. At the end of year three (before the depreciation adjustment), it estimated the new total life to be 10 years and the new salvage value to be $2,600. Compute the revised depreciation.
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