Question

You are viewing Attempt 3 On January 2, 2018, Claymore Corporation purchased a vehicle for $62,500 cash. The company uses straight- line depreciation and estimates that the vehicle will have a five-year useful life. The company has a December 31 year end and adjusts its accounts annually.

Answer 1

Adjusting Entries
Date	Particulars			Debit	Credit
12/31/2018	Depreciation Expense			$ 12,500.00
	To Accumulated Depreciation				$ 12,500.00
12/31/2019	Depreciation Expense			$ 12,500.00
	To Accumulated Depreciation				$ 12,500.00

	Statement of Financial Position
	Property, Plant and Equipment
				2019	2018
	Vehicle			$ 62,500.00	$ 62,500.00
Less:	Accumulated Depreciation			$ 25,000.00	$ 12,500.00
	Carrying Amount			$ 37,500.00	$ 50,000.00

Workings:

Computation of depreciation to be charged
Cost		$ 62,500.00
Useful Life		5	years
Depreciation per year		$ 62500 / 5
	=	$ 12,500.00

Is this okay?