2) Problem Data
Problem Data Recent historical actual depreciation figures and other information:
The actual depreciation expense for the entire year 2017 was $750,000.
The actual depreciation expense for the entire year 2018 was $675,000.
The actual depreciation expense for the entire year 2019 was $630,000.
The company acquired $140,000 in fixed assets in 2020, all are to be depreciated straight-line over seven years.
Assume all items acquired in 2020 have no salvage value, were all acquired on 1/1/2020, and a full year of depreciation is taken in Year 1 and Year 5
Questions
a) What journal entry do you propose Wayne should record each month, January through November 2020?
Explain how you arrived at the amount you did, and show calculations to support your figure.
b) Assume Wayne's final actual 2020 depreciation expense, determined in January 2021 is $790,000.
What final adjusting journal entry should be recorded in December 2020 to "true-up" depreciation expense recorded for the year? Prepare, in good form, a schedule to support your answer for Questions a and b.