Beaver Construction purchases new equipment for $27,600 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 60 months ($460/month). Required: 1.&2. Record the necessary entries in the Joumal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2024 is $0).
Beaver Construction purchases new equipment for $27,600 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 60 months ($460/month). Required: 1.&2. Record the necessary entries in the Joumal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2024 is $0).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Beaver Construction purchases new equipment for $27,600 cash on April 1, 2024. At the time of purchase, the equipment is expected
to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment
evenly over the 60 months ($460/month).
Required:
1.&2. Record the necessary entries in the Joumal Entry Worksheet below.
3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of
Accumulated Depreciation at the beginning of 2024 is $0).
Complete this question by entering your answers in the tabs below.
Required 1
and 2
Required 3
Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No
Journal Entry Required" in the first account field.)
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Journal entry worksheet
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