1. Which journal entry reflects the adjusting entry needed on December 31?
Last year, BOC purchased a building for $1,000,000. The expected life of the building is 20 years and its expected salvage value is $200,000. Now, it is December 31, the end of the fiscal year. No other entries were recorded for this building during the year.
No entry needed. The building was not purchased this year.
Dr. Depreciation Expense 50,000
Cr. Building 50,000
Dr. Depreciation Expense 50,000
Cr. Accumulated Depreciation 50,000
Dr. Depreciation Expense 40,000
Cr. Building 40,000
Dr. Depreciation Expense 40,000
Cr. Accumulated Depreciation 40,000
2. Which journal entry reflects the adjusting entry needed on December 31?:
In November, BOC received a $5,000 cash deposit from a customer for custom-build goods that will be delivered in January (BOC recorded an entry for this $5,000 in November). Now, it is December 31, the end of the fiscal year.
Dr. Unearned Revenue 5,000
Cr. Inventory 5,000
No entry needed.
Dr. Cash 5,000
Cr. Revenue 5,000
Dr. Advances from Customers 5,000
Cr. Revenue 5,000
Dr. Unearned Revenue 5,000
Cr. Revenue 5,000