Suppose that on January 1, Roots Ltd . paid cash of $30,000 for computers that are expected
Question:
Suppose that on January 1, Roots Ltd . paid cash of $30,000 for computers that are expected to remain useful for three years. At the end of three years, the computers' values are expected to be zero.
1. Make journal entries to record (a) the purchase of the computers on January 1, and (b) the annual depreciation on December 31. Include dates and explanations, and use the following accounts: Computer Equipment; Accumulated Depreciation-Computer Equipment; and Depreciation Expense-Computer Equipment.
2. Post to the accounts and show their balances at December 31.
3. What is the computers' carrying amount at December 31?
4. Which account(s) will Roots report on the income statement for the year? Which accounts will appear on the balance sheet of December 31? Show the amount to report for each item on both financial statements.
Balance SheetBalance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin