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For each separate case below, follow the three-step process for adjusting the accumulated depreciation account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step : Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other
a. Accumulated Depreciation. The Krug Company’s Accumulated Depreciation account has a S 13,500 balance to start the year. A review of depreciation schedules reveals that $14,600 of depreciation expense must be recorded for the year.
b. Accumulated Depreciation. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $44,000, had an estimated life of five years, and is expected to have zero value at the end of the five years.
C. Accumulated Depreciation. The company has only one fixed asset (equipment) that it purchased at the start of this year. That asset had cost $32,000, had an estimated life of seven years, and is expected to be valued at $4,000 at the end of the seven years.
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FUNDAMENTAL ACCT PRIN CONNECT ACCESS
- Using the following information, A. Make the December 31 adjusting journal entry for depreciation. B. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,000arrow_forwardCALCULATING AND JOURNALIZING DEPRECIATION Equipment records for Johnson Machine Co. for the year follow. Johnson Machine uses the straight-line method of depreciation. In the case of assets acquired by the fifteenth day of the month, depreciation should be computed for the entire month. In the case of assets acquired after the fifteenth day of the month, no depreciation should be considered for the month in which the asset was acquired. REQUIRED 1. Calculate the depreciation expense for Johnson Machine as of December 31, 20--. 2. Prepare the entry for depreciation expense using a general journal.arrow_forwardal Exam The estimated amount of depreciation on equipment for the current year is $7,130. Journalize the adjusting entry to record the depreciation. If an amount box does not require an entry, leave it blank.arrow_forward
- Using the following information, Make the December 31 adjusting journal entry for depreciation. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,000arrow_forwardThe estimated amount of depreciation on equipment for the current year is $8,330. Journalize the adjusting entry, to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardUse the following account T-balances (assume normal balances) and correct balance information to make the December 31 adjusting journal entries. Specifially for supplies, interest paybale, and accumlated depreciation.arrow_forward
- Calculating and Journalizing Depreciation Equipment records for Johnson Machine Co. for the year follow. Johnson Machine uses the straight-line method of depreciation. In the case of assets acquired by the fifteenth day of the month, depreciation should be computed for the entire month. In the case of assets acquired after the fifteenth day of the month, no depreciation should be considered for the month in which the asset was acquired. Purchase Salvage Date Asset Price Useful Life Value Purchased 8 years January 1 Truck #1 $20,000 $4,000 Truck #2 24,000 8 4,000 April 10 Tractor #1 18,000 3,000 Мay 1 Tractor #2 14,000 6 2,000 June 18 Forklift 40,000 10 4,000 September 1 Required: 1. Calculate the depreciation expense for Johnson Machine as of December 31, 20- 116,000 x Feedback 2. Prepare the entry for depreciation expense using a general journal. Page: 1 DOC. POST. NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT 20-- Dec. 31 2 3arrow_forwardInstructions Bailand Company purchased a building for $218,000 that had an estimated residual value of $8,000 and an estimated service life of 10 years. Bailand purchased the building 4 years ago and has used straight-line depreciation. At the beginning of the fifth year (before it records depreciation expense for the year), the following independent situations occur: 1. Bailand estimates that the asset has 8 years' life remaining (for a total of 12 years). 2. Bailand changes to the sum-of-the-years'-digits method. 3. Bailand discovers that the estimated residual value has been ignored in the computation of depreciation expense. Required: For each of the independent situations, prepare all the journal entries relating the building for the fifth year. Ignore income taxes.arrow_forwardUsing the following information: Cost of asset, $290,000 Accumulated depreciation, beginning of year, $80,000 Current year depreciation, $40,000 A. Make the December 31 adjusting journal entry for depreciation. If an amount box does not require an entry, leave it blank. December 31 B. Determine the net book value (NBV) of the asset on December 31.arrow_forward
- Adjustment for Depreciation of Asset On December 1, delivery equipment was purchased for $7,200. The delivery equipment has an estimated useful life of four years (48 months) and no salvage value. Using the straight-line depreciation method, analyze the necessary adjusting entry as of December 31 (one month) using T accounts, and then formally enter this adjustment in the general journal.arrow_forwardA. Make the December 31 adjusting journal entry for depreciation.B. Determine the net book value (NBV) of the asset on December 31.• Cost of asset, $195,000• Accumulated depreciation, beginning of year, $26,000• Current year depreciation, $13,000arrow_forwardUsing the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use.arrow_forward
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College