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The following transactions are being entered into the accounting system. Using the Chart of Accounts (attached), determine the changes to the balance sheet, income statement, job cost ledger, and equipment ledger as the result of entering each of the following transactions:

a. A $4,000 invoice for concrete charged to job cost code 102.01.32300M.
b. A $23,400 invoice from a subcontractor for HVAC charged to job cost code 201.01.231 00S, 15% retention is withheld from the invoice.
c. A $1,500 bill for Office 1 rent.
d. A $2,000 of depreciation for Office 2.
e. A 120,000 bill to a client for Job 225, and the client holds 10% retention
f. The first loan payment of S2,435 for an equipment, which includes $1655.8 in principal and $779.2 9 in interest.
g. A S4,500 of depreciation for a dump truck.
h. A piece of equipment was sold for S65,000 in cash. It was purchased for $125,000 and $70,000 of depreciation has been taken. There are no outstanding loans for this equipment.

Respuesta :

Answer:

A. Balance sheet + $4000, in WIP or finished good under inventory and + $4000 accounts payable. Income statement + $4000 on cost of sales if job is sold. Job cost ledger + $4000, Equipment ledger no effect.

B. Balance sheet + $23400 WIP, - Bank 85% of invoice, + accounts payable 15% of invoice. INCOME STATEMENT no effect, Job cost legder + 23400 on overheads, Equipment no effect

c. Balance sheet - bank $1500, Income statement +1500 expense, job costing no effect, equipment no effect.

d. Balance sheet +$2000 accumulated depreciation, Income statement +$ 2000 depreciation, Job costing no effect, Equipment no effect.

e. Balance sheet + $12000 Accounts receivables, + $108000 Bank, Income statement + $120000 sales, Job costing no effect, Equipment no effect.

f. Balance sheet -$1655.8 loan, -$2435 bank, income statement + $779.2 expenses(interest), Job costing no effect, equipment no effect.

g.  Balance sheet + $4500 accumulated depreciation, Income statement +$4500 depreciation, job costing no effect, equipment no effect only truck asset.

h. Balance sheet - $55000 Equipment, +$65000 bank, Income statement + $10000 gain on sale of asset. Job costing no effect, Equipment - $55000

Explanation:

Retention by client creates an asset

retention by business creates liability

some of the figures affect some of the accounts only when a condition occurs e.g for a cost in the job costing to affect income statement it must be finished and sold so to be cost of sale.

costs incurred in production are not expenses rather are capitalized to the product and create asset either WIP, FINISHED GOOD OR MATERIAL

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