Case 6 General Journal Account/Description # Debits 6/1/2018 Cash (1) Mortgage Payable $ 7/1/2018 Land (1) Cash $ Credits posted 250,000 $ 250,000 $ 100,000 100,000 Land $ 26,000 Cash $ 26,000 (To record closings costs and cost to knock down building and clear land) Cash $ 6,000 Land $ (To record proceeds from the sale of scrap from old building) 10/1/2018 Building Land Improvements Cash $ $ 6,000 140,000 10,000 $ 150,000 Building $ 2,000 Cash $ 2,000 (To record construction of building, parking of lot and alarm system added) 7/1/2018 Building Mortgage Payale Cash $ $ 8/1/2018 Building Mortgage Payale Cash $ $ 1,250.00 850.00 $ 2,100.00 $ 2,100.00 1,245.75 854.25 9/1/2018 Building $ 1,241.48 Mortgage Payale $ 858.52 Cash $ 2,100.00 (To record July, August, September mortgage payments with interest capitalized) 10/1/2018 Interest Expense Mortgage Payable Cash $ $ 1,237.19 862.81 $ 10/1/2018 Furniture & Fixtures $ 4,000 Equipment $ 34,000 Cash $ (To record purchase of furniture & fixture and equipment) 12/31/2018 Interest Expense Loan Cash (sba loan payments) $ $ Building Interest Expense (Accrued Interest) $ Depreciation Expense $ Accumulated Depreciation (To record depreciation on old equipment) Payment Date 7/1/2018 8/1/2018 9/1/2018 10/1/2018 11/1/2018 12/1/2018 1/1/2019 2/1/2019 3/1/2019 4/1/2019 5/1/2019 6/1/2019 7/1/2019 2,100.00 38,000 320 1,135 $ 1,455 $ 7,436 $ 7,000 7,436 7,000 Payment Date 1/1/2018 2/1/2018 3/1/2018 4/1/2018 5/1/2018 6/1/2018 7/1/2018 8/1/2018 9/1/2018 10/1/2018 11/1/2018 12/1/2018 1/1/2019 2/1/2019 3/1/2019 $ 3,174 Cash Sales Revenue Operating Expense Cash (Revenue and Expenses) $ 700,000 $ 650,000 Cash Furniture & Equipment -old Accumulated Depreciation Gain or Loss on Sale (Sale Assets) $ $ (Depreciation Expense) $ 700,000 $ 650,000 $ $ 7,000 4,000 7,000 4,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Principal 250,000.00 249,150.00 248,295.75 247,437.23 246,574.41 245,707.29 244,835.82 243,960.00 243,079.80 242,195.20 241,306.18 240,412.71 239,514.77 Amortization Schedules Interest Interest Rate/ moth Expense 0.005 $ 1,250.00 0.005 $ 1,245.75 0.005 $ 1,241.48 0.005 $ 1,237.19 0.005 $ 1,232.87 0.005 $ 1,228.54 0.005 $ 1,224.18 0.005 $ 1,219.80 0.005 $ 1,215.40 0.005 $ 1,210.98 0.005 $ 1,206.53 0.005 $ 1,202.06 0.005 $ 1,197.57 Payment Amount ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) ($2,100.00) Applied to Principal $ (850.00) Interest Capitalized $ (854.25) Interest Capitalized $ (858.52) Interest Capitalized $ (862.81) $ (867.13) $ (871.46) $ (875.82) $ (880.20) $ (884.60) $ (889.02) $ (893.47) $ (897.94) $ (902.43) Principal 60,000.00 58,944.93 57,882.82 56,813.63 55,737.31 54,653.82 53,563.10 52,465.11 51,359.81 50,247.13 49,127.04 47,999.47 46,864.40 45,721.75 44,571.49 Amortization Schedules Interest Interest Rate/ moth Expense 0.006666667 $ 400.00 0.006666667 $ 392.97 0.006666667 $ 385.89 0.006666667 $ 378.76 0.006666667 $ 371.58 0.006666667 $ 364.36 0.006666667 $ 357.09 0.006666667 $ 349.77 0.006666667 $ 342.40 0.006666667 $ 334.98 0.006666667 $ 327.51 0.006666667 $ 320.00 0.006666667 $ 312.43 0.006666667 $ 304.81 0.006666667 $ 297.14 Payment Amount ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) ($1,455.07) Applied to Principal $ (1,055.07) $ (1,062.11) $ (1,069.19) $ (1,076.32) $ (1,083.49) $ (1,090.72) $ (1,097.99) $ (1,105.31) $ (1,112.68) $ (1,120.09) $ (1,127.56) $ (1,135.08) $ (1,142.65) $ (1,150.26) $ (1,157.93) Assets Oven Refrigerator Dishwasher Total $ $ $ $ Assigned % of FMV Acquisition Cost 14,000 35.0% $ 11,900 20,000 50.0% $ 17,000 6,000 15.0% $ 5,100 40,000 Depreciation Schedules Straight Line Depreciation-time based, uniform method, assumes asset is used the same time Asset: Oven Residual Estimated Depreciation Accumulated Year Cost Value Life in Yrs Expense Depreciation 2018 2019 2020 2021 2022 2023 $ $ $ $ $ $ Refrigerator Year 2018 2019 2020 2021 2022 Cost $ $ $ $ $ Dishwasher Year 2018 2019 2020 2021 14,000 14,000 14,000 14,000 14,000 14,000 20,000 20,000 20,000 20,000 20,000 Cost $ $ $ $ 6,000 6,000 6,000 6,000 Furniture & Fixture Year Cost 2018 2019 2020 2021 2022 2023 Building $ $ $ $ $ $ 4,000 4,000 4,000 4,000 4,000 4,000 $ $ $ $ $ $ 2,000 2,000 2,000 2,000 2,000 2,000 Residual Value $ $ $ $ $ 4,000 4,000 4,000 4,000 4,000 Residual Value $ $ $ $ 1,000 1,000 1,000 1,000 Residual Value $ $ $ $ $ $ - Residual 5 5 5 5 5 5 Estimated Life in Yrs 4 4 4 4 4 Estimated Life in Yrs 3 3 3 3 Estimated Life in Yrs 5 5 5 5 5 5 Estimated $ $ $ $ $ $ 600 2,400 2,400 2,400 2,400 1,800 Depreciation Expense $ $ $ $ $ 1,000 4,000 4,000 4,000 3,000 Depreciation Expense $ $ $ $ 417 1,667 1,667 1,250 Depreciation Expense $ $ $ $ $ $ 200 800 800 800 800 600 Depreciation $ $ $ $ $ $ 600 3,000 5,400 7,800 10,200 12,000 Accumulated Depreciation $ $ $ $ $ 1,000 5,000 9,000 13,000 16,000 Accumulated Depreciation $ $ $ $ 417 2,083 3,750 5,000 Accumulated Depreciation $ $ $ $ $ $ 200 1,000 1,800 2,600 3,400 4,000 Accumulated Year Cost 2018 2019 2020 2021 2022 2023 $ $ $ $ $ $ Parking Lot Year 2018 2019 2020 2021 2022 2023 145,737 145,737 145,737 145,737 145,737 145,737 Cost $ $ $ $ $ $ 10,000 10,000 10,000 10,000 10,000 10,000 Value $ $ $ $ $ $ 50,000 50,000 50,000 50,000 50,000 50,000 Residual Value $ $ $ $ $ $ - Life in Yrs 25 25 25 25 25 25 Estimated Life in Yrs Expense $ $ $ $ $ $ 957 3,829 3,829 3,829 3,829 3,829 Depreciation Expense Depreciation $ $ $ $ $ $ 957 4,787 8,616 12,446 16,275 20,105 Accumulated Depreciation d the same time Book Value $ $ $ $ $ $ 13,400 11,000 8,600 6,200 3,800 2,000 Book Value $ $ $ $ $ 19,000 15,000 11,000 7,000 4,000 Book Value $ $ $ $ 5,583 3,917 2,250 1,000 Book Value $ $ $ $ $ $ 3,800 3,000 2,200 1,400 600 Book Value $ $ $ $ $ $ 144,780 140,950 137,121 133,291 129,462 125,632 Book Value Assets Oven Refrigerator Dishwasher Total $ $ $ $ Assigned % of FMV Acquisition Cost 14,000 35.0% $ 11,900 20,000 50.0% $ 17,000 6,000 15.0% $ 5,100 40,000 Depreciation Schedules Units of Production-activity, based on how the asset is actually used, most closely follows the matc Asset: Oven Year Residual Value Cost 2018 $ 2019 $ Refrigerator Year 2018 $ 2019 $ Dishwasher Year 2018 $ 2019 $ 14,000 14,000 $ $ Residual Value Cost 20,000 20,000 $ $ 4,000 4,000 Residual Value Cost 6,000 6,000 2,000 2,000 $ $ 1,000 1,000 Estimated Life in Unit 4000 4000 Rate per Unit $ $ Estimated Life in Unit 8000 8000 Rate per Unit $ $ Estimated Life in Unit 2000 2000 3.00 3.00 2.00 2.00 Rate per Unit $ $ 2.50 2.50 Depreciation Expense $ $ 900 3,000 Depreciation Expense $ $ 2,400 4,800 Depreciation Expense $ $ 1,000 2,000 Double Declining Balance Method Accelerated method, time based More depreciation taken in early years, assumes asset is more productive when never, does not consider r Oven Accumulated 2 x 1/ estimated Depreciation Accumulated Year Cost Depreciation life Expense Depreciation 2018 $ 2019 $ 2020 $ Refrigerator Year 2018 $ 2019 $ 2020 $ Dishwasher Year 2018 $ 14,000 14,000 14,000 Cost 20,000 20,000 20,000 Cost 6,000 $ $ $ 1,400 6,440 Accumulated Depreciation $ $ $ 2,500 11,250 Accumulated Depreciation $ - 40% 40% 40% 2 x 1/ estimated life 50% 50% 50% 2 x 1/ estimated life 66.7% $ $ $ 1,400 5,040 3,024 Depreciation Expense $ $ $ 2,500 8,750 4,375 Depreciation Expense $ 1,000 $ $ $ 1,400 6,440 9,464 Accumulated Depreciation $ $ $ 2,500 11,250 15,625 Accumulated Depreciation $ 1,000 2019 $ 2020 $ 6,000 6,000 $ $ 1,000 4,333 66.7% 66.7% $ 3,333 $ 4,333 $ 667 $ 5,000 (Adjusted to book value does not go below sal sely follows the matching principle Accumulated Depreciation $ $ 900 3,900 Book Value $ $ Accumulated Depreciation $ $ 2,400 7,200 Book Value $ $ Accumulated Depreciation $ $ 1,000 3,000 13,100 10,100 17,600 12,800 Book Value $ $ , does not consider residual value Book Value $ $ $ 12,600 7,560 4,536 Book Value $ $ $ 17,500 8,750 4,375 Book Value $ 5,000 5,000 3,000 $ 1,667 $ 1,000 does not go below salvage value) Case 1 Worksheet Trial Balance Totals **Corp Income Tax Exp $ - $ Income Statement - $ Net Income $ Corp Tax 20% $ Personal Tax AGI Standard Ded Exemption Taxable Income Personal Tax Total TaxExpense Balance Sheet Post ClosingTB $ - - $ - General Journal Adjusting Entry Closing Entries