Question
Straight Line Depreciation Class Example: CC Coffee and Cookies Co. started operations in 2018. On May 1, 2018, the Company purchased (on account): Coffee Machine
Straight Line Depreciation Class Example:
CC Coffee and Cookies Co. started operations in 2018.
- On May 1, 2018, the Company purchased (on account): Coffee Machine for $1,300 and Mixer for $650
The journal entry to record the purchases is:
| Date | Accounts | Debit | Credit |
| 5/1/18 |
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- Compute Straight Line Depreciation for the Coffee Machine: Purchased May 1, $1,300 cost, $400 salvage value, 3 years useful life
Depreciation Calculation: Depre. Exp. = cost salvage value* (time in service)
useful life
2018 Depreciation: $1,300 - $400 * (8/12) = $200
3 years
2019 Depreciation:
2020 Depreciation:
2021 Depreciation:
Total Depreciation (2018-2021): $
- The journal entry to record the Depreciation Expense for Year 1 is:
| Date | Accounts | Debit | Credit |
| 12/31/18 | Depreciation Expense - Machine | $200 |
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| Accumulated Deprec. - Machine |
| $200 |
The journal entry to record the Depreciation Expense for Year 2 is:
| Date | Accounts | Debit | Credit |
| 12/31/19 |
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The journal entry to record the Depreciation Expense for Year 3 is:
| Date | Accounts | Debit | Credit |
| 12/31/20 |
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The journal entry to record the Depreciation Expense for Year 4 is:
| Date | Accounts | Debit | Credit |
| 12/31/21 |
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- Compute Straight Line Depreciation for the Mixer: Purchased May 1, $650 cost, $50 salvage value, 4 years useful life
Depreciation Calculation: Depre. Exp. = cost salvage value* (time in service)
useful life
2018 Depreciation: $650- $50 (8/12) = $100
4 years
2019 Depreciation:
2020 Depreciation:
2021 Depreciation:
2022 Depreciation:
Total Depreciation (2018-2021):
- The journal entry to record the Depreciation Expense for Year 1 is:
| Date | Accounts | Debit | Credit |
| 12/31/18 |
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The journal entry to record the Depreciation Expense for Year 2 is:
| Date | Accounts | Debit | Credit |
| 12/31/19 |
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The journal entry to record the Depreciation Expense for Year 3 is:
| Date | Accounts | Debit | Credit |
| 12/31/20 |
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The journal entry to record the Depreciation Expense for Year 4 is:
| Date | Accounts | Debit | Credit |
| 12/31/21 |
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The journal entry to record the Depreciation Expense for the last year is:
| Date | Accounts | Debit | Credit |
| 12/31/22 |
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