Details regarding Leroux Steel's purchases of plant and equipment items during 2020 follow: Plant and Equipment Item Machine A Machine B Estimated Sales Value at End of Estimated Useful Life $ 0 Machine C Date of Purchase a. Jan. 1 b. Apr. 1 c. Nov. 1 Cost $107,000 86,000 43,500 Estimated Useful life 5 years 4 years 2 years 4,400 3,900 Assume Leroux Steel uses the straight-line method to depreciate its assets. Required: Prepare the annual adjusting entry at December 31, 2020, Leroux's year-end, for each plant and equipment item.

Details regarding Leroux Steel's purchases of plant and equipment items during 2020 follow: Plant and Equipment Item Machine A Machine B Estimated Sales Value at End of Estimated Useful Life $ 0 Machine C Date of Purchase a. Jan. 1 b. Apr. 1 c. Nov. 1 Cost $107,000 86,000 43,500 Estimated Useful life 5 years 4 years 2 years 4,400 3,900 Assume Leroux Steel uses the straight-line method to depreciate its assets. Required: Prepare the annual adjusting entry at December 31, 2020, Leroux's year-end, for each plant and equipment item.

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Description: Details regarding Leroux Steel's purchases of plant and equipment items during 2020 follow:Plant andEquipmentItemMachine AMachine BEstimated Sales Valueat End of EstimatedUseful Life$ 0Machine CDate ofPurchasea. Jan. 1b. Apr. 1c. Nov. 1Cost$107,0008

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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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Question

Details regarding Leroux Steel's purchases of plant and equipment items during 2020 follow:
Plant and
Equipment
Item
Machine A
Machine B
Estimated Sales Value
at End of Estimated
Useful Life
$ 0
Machine C
Date of
Purchase
a. Jan. 1
b. Apr. 1
c. Nov. 1
Cost
$107,000
86,000
43,500
Estimated
Useful
life
5 years
4 years
2 years
4,400
3,900
Assume Leroux Steel uses the straight-line method to depreciate its assets.
Required:
Prepare the annual adjusting entry at December 31, 2020, Leroux's year-end, for each plant and equipment item.

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