From the following information prepare adjusting entries in the general journal and enter them in the work sheet. Plant and equipmentto be depreciated are composed of the following: Assets Date Acquired cost estimated usage or life salvage value depreciation method Building 7/1/2014 $306,000 25 years $20,000 sum-of-years' digits Truck #1 4/1/2014 28,000 60,000 miles 3,100 miles driven Truck #2 9/1/2015 33,000 60,000 miles 4,200 miles driven Lift Truck #1* 8/17/2011 7,900 10 years 900 straight-line Lift Truck #2 3/29/2015 4,500 10 years 500 straight-line Lift Truck #3 9/16/2016 5,000 10 years 500 straight-line Office Equipment 7/1/2016 32,800 7 years 2,000 straight-line Computer 12/19/2018 7,600 4 years 1,600 Double-decling *sold 12/31/18 Truck No. 1has been driven 45,000 miles prior to 1/1/18 and truck No. 2 has been driven 30,500 miles prior to 1/1/18. During 2018 truck No. 1 was driven 12000 miles and truck No. 2 was driven 16000 miles. Remember that Rockford Company takes a half-year's depreciation in the year of acquisition and a half-year in the year of sale.
From the following information prepare adjusting entries in the general journal and enter them in the work sheet. Plant and equipmentto be depreciated are composed of the following: Assets Date Acquired cost estimated usage or life salvage value depreciation method Building 7/1/2014 $306,000 25 years $20,000 sum-of-years' digits Truck #1 4/1/2014 28,000 60,000 miles 3,100 miles driven Truck #2 9/1/2015 33,000 60,000 miles 4,200 miles driven Lift Truck #1* 8/17/2011 7,900 10 years 900 straight-line Lift Truck #2 3/29/2015 4,500 10 years 500 straight-line Lift Truck #3 9/16/2016 5,000 10 years 500 straight-line Office Equipment 7/1/2016 32,800 7 years 2,000 straight-line Computer 12/19/2018 7,600 4 years 1,600 Double-decling *sold 12/31/18 Truck No. 1has been driven 45,000 miles prior to 1/1/18 and truck No. 2 has been driven 30,500 miles prior to 1/1/18. During 2018 truck No. 1 was driven 12000 miles and truck No. 2 was driven 16000 miles. Remember that Rockford Company takes a half-year's depreciation in the year of acquisition and a half-year in the year of sale.
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
From the following information prepare
| Plant and equipmentto be |
|||||
| Assets | Date Acquired |
cost | estimated usage or life |
salvage value |
depreciation method |
| Building | 7/1/2014 | $306,000 | 25 years | $20,000 | sum-of-years' digits |
| Truck #1 | 4/1/2014 | 28,000 | 60,000 miles | 3,100 | miles driven |
| Truck #2 | 9/1/2015 | 33,000 | 60,000 miles | 4,200 | miles driven |
| Lift Truck #1* | 8/17/2011 | 7,900 | 10 years | 900 | straight-line |
| Lift Truck #2 | 3/29/2015 | 4,500 | 10 years | 500 | straight-line |
| Lift Truck #3 | 9/16/2016 | 5,000 | 10 years | 500 | straight-line |
| Office Equipment | 7/1/2016 | 32,800 | 7 years | 2,000 | straight-line |
| Computer | 12/19/2018 | 7,600 | 4 years | 1,600 | Double-decling |
| *sold 12/31/18 | |||||
| Truck No. 1has been driven 45,000 miles prior to 1/1/18 and truck No. 2 has been driven 30,500 miles prior to 1/1/18. During 2018 truck No. 1 was driven 12000 miles and truck No. 2 was driven 16000 miles. Remember that Rockford Company takes a half-year's depreciation in the year of acquisition and a half-year in the year of sale. |
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