The following assets are owned by the Dinnell Company: In the year of acquisition and retirement of
Question:
The following assets are owned by the Dinnell Company:
In the year of acquisition and retirement of an asset, the company records depreciation for one-half year. During 2008, asset A was sold for $7,000.
Required
Prepare the journal entries to record depreciation on each asset for 2005 through 2008 and the sale of assetA.
Asset Year purchased Cost Expected life Residual value Depreciation method Straight-line Sum-of-the-years-digits Double-declining-balance 2005 $20,000 5 years $2,000 2006 $40,000 8 years 2007 $100,000 10 years $10,000
Step by Step Answer:
2005 A Straightline depreciation 3600 per year Depreciation Expense 3600 x 1800 Accumulated Deprecia...View the full answer
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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