Sol:
As per the question given details are as follows
COST OF ASSET | $ 12,000.00 | |
DATE OF PURCHASE | 01-01-21 | |
SALVAGE VALUE | $ 1,000.00 | |
ESTIMATED LIFE | 10 YEARS | |
ANNUAL DEPRECIATION | ($ 12000- $ 1000)/10 | $ 1,100.00 |
ACCUMULATED DEPRECIATION FOR 4 YEARS | $ 1100*4 | $ 4,400.00 |
SINCE 1-JAN-2025, THERE IS A CHANGE IN SALVAGE VALUE AND TOTAL LIFE OF EQUIPMENT, SO DEPRECIATION AMOUNT FOR THE YEAR 2025 WILL BE = (HISTORICAL COST- ACCUMULATED DEPRECIATION)-SALVAGE VALUE/ REMAINING USEFUL LIFE
= (12000-4400)-1200/4
= $ 1600
JOURNAL ENTRY | |||
DATE | ACCOUNTS | DEBIT | CREDIT |
DEPRECIATION EXPENSE ACCOUNT Dr. | $ 1,600.00 | ||
31-Dec-25 | ACCUMULATED DEPRECIATION | $ 1,600.00 | |
ACCUMULATED DEPRECIATION IN THE YEAR 2028 WILL BE = 1600*4 = $6400
Suppose if the question asks to prepare journal for Depreciation expense for 2028, we need to...
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