Asked by Sukhkaran Dhaliwal on Jun 23, 2024
Verified
On July 1, Andrew Company purchased equipment at a cost of $150,000 that has a depreciable cost of $120,000 and an estimated useful life of three years or 60,000 hours.Using straight-line depreciation, prepare the journal entry to record depreciation expense for
(a) the first year,
(b) the second year, and
(c) the last year.
Depreciable Cost
This refers to the total cost of an asset that is subject to depreciation over its useful life, including the purchase price and any additional costs necessary to make the asset usable.
Journal Entry
A record of a transaction in the general journal, indicating the accounts and amounts to be debited and credited.
Hours
A measure of time spent performing tasks or activities, often used in work, scheduling, and billing contexts.
- Master and implement the techniques of double-declining-balance and straight-line methods for depreciating assets.
- Evaluate and log financial impacts of depreciation, depletion, and amortization.
- Understand the accounting for equipment purchases, including cost, depreciable cost, estimated useful life, and residual value considerations.
Verified Answer
(partial) years
(a) Depreciation Expense 20,000Accumulated Depreciation 20,000
(b) Depreciation Expense 40,000Accumulated Depreciation 40,000
(c) Depreciation Expense 20,000Accumulated Depreciation 20,000
Learning Objectives
- Master and implement the techniques of double-declining-balance and straight-line methods for depreciating assets.
- Evaluate and log financial impacts of depreciation, depletion, and amortization.
- Understand the accounting for equipment purchases, including cost, depreciable cost, estimated useful life, and residual value considerations.
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