Question

For each separate case below, follow the three-step process for adjusting the Accumulated Depreciation account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. The Krug Company's Accumulated Depreciation account has a $19,500 balance to start the year. A review of depreciation schedules reveals that $21,800 of depreciation expense must be recorded for the year. Accumulated depreciation Debit or Credit? 41,300 Debit Step 1: Determine what the current account balance equals. $ 41,300 Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Depreciation expense Accumulated depreciation b. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $56,000, had an estimated life of 5 years, and is expected to have zero value at the end of the 5 years. Accumulated depreciation -Truck Step 1: Determine what the current account balance equals. 0 Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2

Answer 1

Solution & (a) Determine what the current account balance equal $19500 Determine what the current account balance should equal $41300 (19500 + 21800) Adjusting entry Depreciation expense $ 21800 Accumulated depreciation $21800 Determine what the current account balance equal $ Determine what the current account balance should equal ( stovo) Adjusting entry 11900 Depreciation expense $ 1.200 Accumulated depreciation $11200