You are performing a reconstruction analysis for equipment transactions during the year. You are given the following beginning and ending balances for the current yea Feb. 1 Jan. 31 Equipment $153,600 $152,400 Accumulated depreciation 65,700 68,700 During the year, the company sold equipment with a cost of $23,100 and accumulate
You are performing a reconstruction analysis for equipment transactions during the year. You are given the following beginning and ending balances for the current yea Feb. 1 Jan. 31 Equipment $153,600 $152,400 Accumulated depreciation 65,700 68,700 During the year, the company sold equipment with a cost of $23,100 and accumulate
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section: Chapter Questions
Problem 1AFE
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:You are performing a reconstruction analysis for equipment transactions during the
year. You are given the following beginning and ending balances for the current year:
Feb. 1
Jan. 31
Equipment
$153,600 $152,400
Accumulated depreciation
65,700
68,700
During the year, the company sold equipment with a cost of $23,100 and accumulated
depreciation of $6,800 for $9,200 cash. It purchased equipment during the year.
Using the reconstruction method, estimate the following. Record the dollar amounts,
to the nearest dollar with no commas or dollar signs (e.g. 5623):
1. How much did the company spend on equipment during the year?
2. How much equipment depreciation expense was recorded for the year?
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