Express Co purchased equipment on March 1, 2019, for $95.000 on account. The equipment had an estimated uneful e of five years with a residual value of $5.000. The equipment is disposed of on Febrary 1.2022 Express Co. uses the diminishing balance method of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month The company has an Aupunt 31 year end Your answer is correct Record the acquisition of the equipment on March 1. 2019. (Credit account titles are automatically indented when the amount is entered. De not indent manually. If no entry is required, select "Ne Entry for the account titles and enter Ofor the amounts Debit Credit Date Account Titles and Explanation 9000 Mar 1 fooment
Express Co purchased equipment on March 1, 2019, for $95.000 on account. The equipment had an estimated uneful e of five years with a residual value of $5.000. The equipment is disposed of on Febrary 1.2022 Express Co. uses the diminishing balance method of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month The company has an Aupunt 31 year end Your answer is correct Record the acquisition of the equipment on March 1. 2019. (Credit account titles are automatically indented when the amount is entered. De not indent manually. If no entry is required, select "Ne Entry for the account titles and enter Ofor the amounts Debit Credit Date Account Titles and Explanation 9000 Mar 1 fooment
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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Question
![Express Co. purchased equipment on March 1, 2019, for $95.000 on account. The equipment had an estimated useful life of five years
with a residual value of $5.000. The equipment is disposed of on February 1. 2022. Express Co. uses the diminishing balance method
of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month The company has an August 31
year end
Your answer is correct.
Record the acquisition of the equipment on March 1, 2019. (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 amountsJ
Debit
Credit
Date Account Titles and Explanation
95000
Mar 1
faiement
500
Accounts Favable
Torrserd purchase of equipment on account)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc172220c-b8c6-4fe6-be57-f2666808bc01%2Fd99f8c99-0c77-4681-91e0-08934d406e8c%2Fo8udggj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Express Co. purchased equipment on March 1, 2019, for $95.000 on account. The equipment had an estimated useful life of five years
with a residual value of $5.000. The equipment is disposed of on February 1. 2022. Express Co. uses the diminishing balance method
of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month The company has an August 31
year end
Your answer is correct.
Record the acquisition of the equipment on March 1, 2019. (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 amountsJ
Debit
Credit
Date Account Titles and Explanation
95000
Mar 1
faiement
500
Accounts Favable
Torrserd purchase of equipment on account)
![Your answer is partially correct
Record the disposal on February 1, 2022, under the following assumptions: (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.)
1.
It was scrapped with no residual value.
2.
It was sold for $55,000.
3.
It was sold for $45,000.
It was traded for new equipment with a list price of $97,000. Express was given a trade-in allowance of $52.000 on the
old equipment and paid the balance in cash. Express determined the old equipment's fair value to be $47,000 at the date
of the exchange.
4.
Credit
Date Account Titlesand Explanation](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc172220c-b8c6-4fe6-be57-f2666808bc01%2Fd99f8c99-0c77-4681-91e0-08934d406e8c%2Fayxal0j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Your answer is partially correct
Record the disposal on February 1, 2022, under the following assumptions: (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.)
1.
It was scrapped with no residual value.
2.
It was sold for $55,000.
3.
It was sold for $45,000.
It was traded for new equipment with a list price of $97,000. Express was given a trade-in allowance of $52.000 on the
old equipment and paid the balance in cash. Express determined the old equipment's fair value to be $47,000 at the date
of the exchange.
4.
Credit
Date Account Titlesand Explanation
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