At the beginning of Year 1, Copland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value.

Exercise 8-9A Part b

b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-balance methods in a financial statements model like the following one

c. Prepare the journal entries to recognize depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation (2) Double-declining-balance depreciation.

! Required information Exercise 8-9A Computing and recording straight-line versus double-declining-balance depreciation LO 8-2, 8-3 [The following information applies to the questions displayed below.) At the beginning of Year 1, Copland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value. Exercise 8-9A Part b b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model like the following one: (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.) Balance Sheet COPELAND DRUGSTORE Statements Model Income Statement Equity Revenue - Expense = Net Income Retained Earnings Cash Flow Assets Book Value of Comp. Sys. Cash Straight-line depreciation Double-declining-balance depreciation = Exercise 8-9A Part c c. Prepare the journal entries to recognize depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 > Record depreciation expense. Note: Enter debits before credits. Date General Journal redit Yr.1 Record entry Clear entry View general journal (2) Double-declining-balance depreciation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record depreciation expense for year 1. Note: Enter debits before credits. Date General Journal Debit Credit Yr. 1 Record entry ear entry View general journal