ACE INTEL SYSTEMS, INC. Depreciation and Accumulated Depreciation at July 31, 2014 Adjusting Workpaper Format The depreciation sheet in this workbook already shows how depreciation has been recorded up to nov "WAS" part). These calculations were incorrect and it is your task to calculate the correct depreciation correcting the previously recorded error while at the same time calculating the depreciation for July The next section is the "should-have-been" ("S/H/B"). This is where you compute what the depreciati should have been, through July 31, 2014. Once you have done that, you'll compute the difference bet what has already been recorded and what should have been recorded, and then make an adjusting ja entry to record the correction The cells where l expect you to make data entries on the spreadsheet are all marked with "XXXX" A couple of hints: all assets use the straight-line method and you should assume $0 salvage value. The Hummer H2 and the communications equipment both use the half-year convention. To compute the depreciation for these, you'll need to figure out how much depreciation should be allocated each of th years. You will then half that amount as this is the first year of depreciation for both assets (half-year convention). Finally, you'll allocate a portion of that. Remember that we are computing depreciation 31, 2014, and not December 31, 2014, therefore only a portion of the 2014 depreciation will be allocat this point. The YTD months and total months cells in the spreadsheet template are there for purposes allocating the portion of the depreciation that should be on the books as of July 31. The YTD cell will h number of months of depreciation that should be on the books as of July 31, and the Total cell will hol number of months of depreciation that will be on the books in all of 2014 The building uses the mid-month convention. As such, the easiest way to determine the depreciation compute the monthly depreciation (the amount that should be depreciated each month over its 39 ye and allocate the appropriate number of months as of July 31, 2014. Remember that because AlIS, Inc. i mid-month convention for the building, you'll only allocate a half of a month's depreciation the first month. The easiest way to do this using the spreadsheet is to end your value in cell G32 with.5. So, if building had been placed into service in June 2014 (it wasn't), you would put 1.5 in cell G32. One mon July and a half-month for June Check figures: Total depreciation already recorded ("WAS"): $10,763.00 Total depreciation that should have been recorded as of July 31 ("S/H/B"): $17,242.02 Journal entry to 515-Depreciation Expense to correct is $6,479.02 debit. Remember to use cell references and formulas when completing this spreadsheet. Simply typing numt the depreciation cells will result in no credit. G/L G/L Pollcy Pollcy G/L Accum. Deprc. Account (Accumulated Doprociation) Cost Date Acquira d Lifc Convention WAS Per bocks, G/L) S 30,000.00 122,07E Throuh June W12/2014 2/z2/2014 2/5/201 Hurnmer H2 5 1,200.00 Communications Equi pent Office Building 5 4,883.0 702,00o 14, 3 A680.00 $ 1,3. YID Monthe Total Months Accum. Deprec S/H/ Throuth July Account (Accumulated Deprcciation) Date Acquire d Cost Life Convention 52, 4/12/2014 2/z2/2014 2/5/2014 Hummer H XX XX 122,0 72,0 $876,576.0O Communications Equi pment XX XX XX Offi uilding 39 MM XXX Difference Neaded for Adjustmant Hummer H2 Communications Equipment ffice Ruilding X AJE 1 Debit Credit 51 epreclation xpense TD CORRECT 81 A/D lummer 12 8 A/D Comminitians Fquipnent XX 83-A/D O11ice Buil ding (TG properly reccrd accumul ated de preclation for all assets, through July 3, 2014.) ACE INTEL SYSTEMS, INC. Depreciation and Accumulated Depreciation at July 31, 2014 Adjusting Workpaper Format The depreciation sheet in this workbook already shows how depreciation has been recorded up to nov "WAS" part). These calculations were incorrect and it is your task to calculate the correct depreciation correcting the previously recorded error while at the same time calculating the depreciation for July The next section is the "should-have-been" ("S/H/B"). This is where you compute what the depreciati should have been, through July 31, 2014. Once you have done that, you'll compute the difference bet what has already been recorded and what should have been recorded, and then make an adjusting ja entry to record the correction The cells where l expect you to make data entries on the spreadsheet are all marked with "XXXX" A couple of hints: all assets use the straight-line method and you should assume $0 salvage value. The Hummer H2 and the communications equipment both use the half-year convention. To compute the depreciation for these, you'll need to figure out how much depreciation should be allocated each of th years. You will then half that amount as this is the first year of depreciation for both assets (half-year convention). Finally, you'll allocate a portion of that. Remember that we are computing depreciation 31, 2014, and not December 31, 2014, therefore only a portion of the 2014 depreciation will be allocat this point. The YTD months and total months cells in the spreadsheet template are there for purposes allocating the portion of the depreciation that should be on the books as of July 31. The YTD cell will h number of months of depreciation that should be on the books as of July 31, and the Total cell will hol number of months of depreciation that will be on the books in all of 2014 The building uses the mid-month convention. As such, the easiest way to determine the depreciation compute the monthly depreciation (the amount that should be depreciated each month over its 39 ye and allocate the appropriate number of months as of July 31, 2014. Remember that because AlIS, Inc. i mid-month convention for the building, you'll only allocate a half of a month's depreciation the first month. The easiest way to do this using the spreadsheet is to end your value in cell G32 with.5. So, if building had been placed into service in June 2014 (it wasn't), you would put 1.5 in cell G32. One mon July and a half-month for June Check figures: Total depreciation already recorded ("WAS"): $10,763.00 Total depreciation that should have been recorded as of July 31 ("S/H/B"): $17,242.02 Journal entry to 515-Depreciation Expense to correct is $6,479.02 debit. Remember to use cell references and formulas when completing this spreadsheet. Simply typing numt the depreciation cells will result in no credit. G/L G/L Pollcy Pollcy G/L Accum. Deprc. Account (Accumulated Doprociation) Cost Date Acquira d Lifc Convention WAS Per bocks, G/L) S 30,000.00 122,07E Throuh June W12/2014 2/z2/2014 2/5/201 Hurnmer H2 5 1,200.00 Communications Equi pent Office Building 5 4,883.0 702,00o 14, 3 A680.00 $ 1,3. YID Monthe Total Months Accum. Deprec S/H/ Throuth July Account (Accumulated Deprcciation) Date Acquire d Cost Life Convention 52, 4/12/2014 2/z2/2014 2/5/2014 Hummer H XX XX 122,0 72,0 $876,576.0O Communications Equi pment XX XX XX Offi uilding 39 MM XXX Difference Neaded for Adjustmant Hummer H2 Communications Equipment ffice Ruilding X AJE 1 Debit Credit 51 epreclation xpense TD CORRECT 81 A/D lummer 12 8 A/D Comminitians Fquipnent XX 83-A/D O11ice Buil ding (TG properly reccrd accumul ated de preclation for all assets, through July 3, 2014.)