Equipment costing $19,200 with a 10-year useful life and an estimated $3,200 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 2,000 units of product during its life. It produced 300 units in the first year. Record the journal entries for equipment depreciation for the first year under straight-line, units-of-production, and double-declining- balance.
Equipment costing $19,200 with a 10-year useful life and an estimated $3,200 salvage value is acquired and started operating on January 1. The equipment is estimated to produce 2,000 units of product during its life. It produced 300 units in the first year. Record the journal entries for equipment depreciation for the first year under straight-line, units-of-production, and double-declining- balance.
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:Equipment costing $19,200 with a 10-year useful life and an estimated $3,200 salvage value is acquired and started
operating on January 1. The equipment is estimated to produce 2,000 units of product during its life. It produced 300 units
in the first year.
Record the journal entries for equipment depreciation for the first year under straight-line, units-of-production, and double-declining-
balance.
View transaction list
Journal entry worksheet
A
B
C
Record depreciation for the first year under straight-line.
Transaction
1
Note: Enter debits before credits.
General Journal
Debit
Credit
>
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