Vargas Company purchased a computer for $3,800 on January 1, 2016. The computer is estimated to...
Vargas Company purchased a computer for $3,800 on January 1, 2016. The computer is estimated to have a 5-year useful life and a $900 salvage value. What adjusting entry would Vargas record on December 31, 2016 to recognize expense related to use of the computer?
Homework Answers
Ans:
|
Date |
Account Title and explanation |
Debit $ |
Credit $ |
|
31-12-2016 |
Depreciation expenses |
$580 |
|
|
Accumulated Depreciation |
$580 |
||
|
(Entry to record usage of computer as Depreciation) |
Note:
Calculation Depreciation:
|
Cost of the computer |
$3,800 |
|
Less: Salvage value |
($900) |
|
Depreciable value |
$2,900 |
|
Estimated Useful life |
5 years |
|
Annual depreciation $2,900/5 years |
$580 |
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