what are closing entries and why are they necessary 643707

1. What are adjusting entries and why are they necessary?

2. What are closing entries and why are they necessary?

3. Jay Hawk, maintenance supervisor for Boston Insurance Co., has purchased a riding lawnmower and accessories to be used in maintaining the grounds around corporate headquarters. He has sent the following information to the accounting department.

Cost of   mower and accessories	$4,000	Date   purchased	7/1/2012
Estimated   useful life	5 yrs	Monthly   salary of groundskeeper	$1,100
Salvage   value	$0	Estimated   annual fuel cost	$150

Compute the amount of depreciation expense (related to the mower and accessories) that should be reported on Boston’s December 31, 2012, income statement. Assume straight line depreciation.