Exercise 9-08 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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Show List of Accounts Link to Text Prepare the journal entry to record depreciation on December 31, 2020. (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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Show List of Accounts Link to Text Compute the revised annual depreciation on December 31, 2022. Revised annual depreciation $ Show List of Accounts Link to Text Prepare the journal entry to record depreciation on December 31, 2022. (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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Show List of Accounts Link to Text Compute the balance in Accumulated Depreciation—Equipment for this equipment after depreciation expense has been recorded on December 31, 2022. Accumulated Depreciation—Equipment $ Click if you would like to Show Work for this question: Open Show Work Show List of Accounts Link to Text
1 | the journal entry to record depreciation on December 31, 2019. | ||
Date | Account Title | Debit | Credit |
31.12.2019 | Depreciation ((90000-10000) / 5 *6/12) | $ 8,000.00 | |
Accumulated Depreciation—Equipment | $ 8,000.00 |
2 | the journal entry to record depreciation on December 31, 2020. | ||
Date | Account Title | Debit | Credit |
31.12.2020 | Depreciation | $ 16,000.00 | |
Accumulated Depreciation—Equipment | $ 16,000.00 | ||
(90000-10000)/5 |
3 | Compute the revised annual depreciation on December 31, 2022. | |
Original Cost | $ 90,000.00 | |
Less: Accumulated Depreciation from 1.07.2019 to 31.12.2021 | $ 40,000.00 | |
Book Value as on 1.01.2022 | $ 50,000.00 | |
Less: Revised Salvage Value | $ 5,000.00 | |
Value to be Depreciated | $ 45,000.00 | |
Revised Estimated useful life | 7.5 years | |
Revised Annual Depreciation for year 2022 (45000 / 7.5) | $ 6,000.00 | |
The revised annual depreciation on December 31, 2022. | $6,000 |
4 | the journal entry to record depreciation on December 31, 2022. | ||
Date | Account Title | Debit | Credit |
31.12.2022 | Depreciation | $ 6,000.00 | |
Accumulated Depreciation—Equipment | $ 6,000.00 |
5 |
Compute the balance in Accumulated Depreciation—Equipment for this equipment after depreciation expense has been recorded on December 31, 2022. |
Accumulated Depreciation from 1.07.2019 to 31.12.2021 | $ 40,000.00 |
Add: Depreciation for 2022 | $ 6,000.00 |
the balance in Accumulated Depreciation—Equipment | $ 46,000.00 |
Please give positive rating and if have any doubt please ask in comments.
Exercise 9-08 On July 1, 2019, Sandhill Co. purchased new equipment for $90,000. Its estimated useful...
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