Question

	The fixed assets have estimated useful lives as follows:
	Building - 31.5 years
	Computer Equipment - 5.0 years
32.	Office Equipment - 7.0 years
	Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building’s scrap value is $7,500. The office equipment has a scrap value of $350. The computer equipment has no scrap value. Calculate the depreciation for one month.

June 16: Byte purchased a building and the land it is on for $131,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $21,000.00. The balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $13,100.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance.

June 1:   Check # 5001 was used to purchased computer equipment costing $15,120.00 from Kelly Hudson. The invoice number was 20117.

June 4: Additional office equipment costing $600.00 was purchased on credit from Discount Computer Corporation. The invoice number was 98432.

June 8: Unsatisfactory office equipment costing $120.00 from invoice number 98432 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.

Can someone please tell me what the journal entry would be for this? There is only room to record 2 debits and 2 credits for this entry.. Thanks.

Answer 1

Jornal Entries Date General Ledger Jun-16 Land Building Accounts Payables (Land and building purchased) Debit Credit 21000 111000 131000 15120 Jun-01 Computer Equipment Accounts Payable (Computer equipment purchased) 15120 600 Jun-04 Office Equipment Accounts Payable (Office equipment purchased) 600 120 Jun-08 Accounts Payable Office Equipment (Purchase return of office equipment) 120 Calculation of monthly depreciation under straight line method: Depreciation per year=( Asset value - Scrap value) / Useful life of asset Life of Asset in years 7500 31.5 Asset Name Building Computer Equipment Office Equipment Asset Scrap Value 111000 15120 480 350 Monthly depreciation on building =(111000 - 7500 / 31.5) /12 =3285.71 / 12 =273.81 Monthly depreciation on computer equipment =(15120 - 0/5)/12 =3024 / 12 =252 Monthly depreciation on office equipmrnt =(480 - 350 /7)/12 =18.57 / 12 = 1.55