A new accountant working for Spirit Walker Company records $900 Depreciation Expense on store equipment as follows: Depreciation Expense 900 Cash 900 The effect of this entry is to Entry field with incorrect answer understate total assets on the balance sheet as of December 31. understate the book value of the depreciable assets as of December 31. overstate the book value of the depreciable assets at December 31. adjust the accounts to their proper amounts on December 31.

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6