On Jan. 1, 2017, Ski Corp. purchased a new snow-grooming machine for $ 50,000. The machine...
On Jan. 1, 2017, Ski Corp. purchased a new snow-grooming machine for $ 50,000. The machine is estimated to have a 10-year life with a $2,000 salvage value. What journal entry would Ski Corp. make at Dec. 31, 2017, if it uses straight-line method of depreciation.
1- Calculate depreciation expense.
2- Journalize the first year's depreciation.
Homework Answers
1. Depreciation expense = (Cost - salvage value ) / estimated life of the assets
= ($50000 - 2000) / 10 = $4,800
2.
| Date | Account Titles and Explanation | Debit | Credit |
| Dec. 31, 2017 | Depreciation expense | $4,800 | |
| Accumulated Depreciation | $4,800 | ||
| (To record the depreciation expense) |
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