During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account.

During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account. 

The cost of the merchandise sold is $875,000. What is the amount of the gross profit?

Answer:

a. $665,800 ($315,800 + $1,225,000 – $875,000)

The estimated amount of depreciation on equipment for the current year is $7,700. Journalize the adjusting entry

The estimated amount of depreciation on equipment for the current year is $7,700. 

Journalize the adjusting entry (include an explanation) to record the depreciation.

Answer:

Depreciation Expense 7,700

                  Accumulated Depreciation—Equipment 7,700

                   Depreciation on equipment.

If the net income for the current year had been $196,400 in Exercise 3-23, what would have been the correct net income if the proper adjusting entries had been made?

If the net income for the current year had been $196,400 in Exercise 3-23, what would have been the correct net income if the proper adjusting entries had been made?

Answers:

$218,530 ($196,400 + $34,900 – $12,770)

The estimated amount of depreciation on equipment for the current year is $8,200. Journalize the adjusting entry to record the depreciation.

The estimated amount of depreciation on equipment for the current year is $8,200. Journalize the adjusting entry to record the depreciation.

Answers:

Depreciation Expense8,200

Accumulated Depreciation—Equipment8,200

Depreciation on equipment.