Question

assume that XYZ catering services paid $28,000 for equipment with a 14 year life and zero expected residual value. After using the equipment for six years, the company determines that the asset will remain useful for only four more years.

Assume that XYZ Catering Services and 28.000 for men with a 14 year and respected residual value Aller using the equipment for years, the con t e nt wil l for only for more years Read the ments Requirement 1. Record depreciation expense on the ment for you by the straighine method First, select the lo c al the company's reve depreciation expense on the man w hen the amounts and a t the depreciation for rooms with a wo ) Rendavat Record the depreciation on the game for year record it, then credits Select the nation on the last line of the uma Accounts and Explanation Requirement. What is m ed den at the end of

Answer 1

a) Revised depreciation

Depreciable base	-	Residual value	/	remaining life	=	Revised depreciation
(28000-12000)	-	0	/	4	-	4000

b) Journal entry

Date	account and explanation	Debit	Credit
Dec 31	Depreciation expense	4000
	Accumulated depreciation-equipment		4000

c) Accumulated depreciation at the year end 7 = 12000+4000 = 16000