Question

On July 1, 2019, Sandhill Co, purchased new equipment for $90,000. Its estimated useful life was 5 years with a $10,000 salvage value. On December 31, 2022, the company estimated that the equipment's remaining useful life was 10 years, with a revised salvage value of $5,000. Prepare the journal entry to record depreciation on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Depreciation Expense 5000 Accumulated Depreciation Equipment

Answer 1

a) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense (90000-10000/5)*6/12	8000
Accumulated depreciation-equipment		8000

b) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense (90000-10000/5)	16000
Accumulated depreciation-equipment		16000

c) Revised annual depreciation = (90000-40000-5000)/10 = 4500

d) Journal entry

Account title and explanation	Debit	Credit
Depreciation expense	4500
Accumulated depreciation-equipment		4500

e) Accumulated depreciation-equipment = 40000+4500 = $44500