Concord Company is in the process of preparing its financial statements for 2025. Assume that no entries for depreciation have been recorded in 2025. The following information related to depreciation of fixed assets is provided to you. 1 Concord purchased equipment on January 2, 2022, for $86,600. At that time, the equipment had an estimated useful life of 10 years with a $4,600 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2025, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 salvage value. 2 3. (a) During 2025, Concord changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $320,000. It had a useful life of 10 years and a salvage value of $32,000. The following computations present depreciation on both bases for 2023 and 2024. 2024 Straight-line $28,800 Declining-balance 51,200 2023 $28,800 64,000 Concord purchased a machine on July 1, 2023, at a cost of $140,000. The machine has a salvage value of $14,000 and a useful life of 8 years. Concord's bookkeeper recorded straight-line depreciation in 2023 and 2024 but failed to consider the salvage value.
Concord Company is in the process of preparing its financial statements for 2025. Assume that no entries for depreciation have been recorded in 2025. The following information related to depreciation of fixed assets is provided to you. 1 Concord purchased equipment on January 2, 2022, for $86,600. At that time, the equipment had an estimated useful life of 10 years with a $4,600 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2025, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 salvage value. 2 3. (a) During 2025, Concord changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $320,000. It had a useful life of 10 years and a salvage value of $32,000. The following computations present depreciation on both bases for 2023 and 2024. 2024 Straight-line $28,800 Declining-balance 51,200 2023 $28,800 64,000 Concord purchased a machine on July 1, 2023, at a cost of $140,000. The machine has a salvage value of $14,000 and a useful life of 8 years. Concord's bookkeeper recorded straight-line depreciation in 2023 and 2024 but failed to consider the salvage value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Concord Company is in the process of preparing its financial statements for 2025. Assume that no entries for depreciation have been
recorded in 2025. The following information related to depreciation of fixed assets is provided to you.
1.
2.
3.
(a)
1.
Concord purchased equipment on January 2, 2022, for $86,600. At that time, the equipment had an estimated useful life of
10 years with a $4,600 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2025, as a result of
additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000
salvage value.
2.
During 2025, Concord changed from the double-declining-balance method for its building to the straight-line method. The
building originally cost $320,000. It had a useful life of 10 years and a salvage value of $32,000. The following computations
present depreciation on both bases for 2023 and 2024.
3.
Straight-line
$28,800 $28,800
Declining-balance 51,200 64,000
Prepare the journal entries to record depreciation expense for 2025 and correct any errors made to date related to the
information provided. (Ignore taxes.) (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit
entries.)
No. Account Titles and Explanation
2024
Concord purchased a machine on July 1, 2023, at a cost of $140,000. The machine has a salvage value of $14,000 and a
useful life of 8 years. Concord's bookkeeper recorded straight-line depreciation in 2023 and 2024 but failed to consider the
salvage value.
Your answer is partially correct.
Depreciation Expense
Depreciation Expanse
Accumulated Depreciation Equipment
2023
Accumulated Depreciation-Buildings
Depreciation Expense
Accumulated Depreciation Machinery
(To record current year depreciation.)
Accumulated Depreciation Machinery
Retained Earnings
(To correct prior year depreciation.)
Debit
20900
22400
15750
35200
Credit
GOOOOO
20900
22400
15750
35:200
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