I already got Requirment 1, 2 & 3 answered and you please provide answers to the rest of the requirments. Recently the Ace Manufacturing Company purchased an office building and a new computer system. Below is the information about these two new items of Property, Plant, & Equipment. The following are the facts for the office building: Date on which the building was purchased .... April 1, 2021 Purchase price ............................................... $1,800,000 Method of payment ........................................ paid $300,000 cash – signed a note for the remainder of the purchase price Estimated life ................................................. 50 years Estimated value at the end of 50 years .......... $0 Depreciation method ...................................... Straight-Line The following are the facts for the computer system: Date on which computer was purchased ........ May 1, 2021 Purchase price ............................................... $58,800 Method of payment ........................................ Cash Estimated life ................................................. 7 years Estimated value at the end of 7 years ............ $0 Depreciation method ...................................... Straight-Line The following is a partial list of the accounts in Ace’s General Ledger. These are the only accounts you need for this problem. Cash Building (asset account) Accumulated Depreciation–Building Computer (asset account) Accumulated Depreciation–Computer Note Payable Depreciation Expense Requirement 1 Prepare the General Journal entry to record the purchase of the new building on April 1. Requirement 2 Calculate the amount of monthly depreciation for the new building. Chapter 7 – Adjusting Entries SOLID FOOTING 85 Problem 7-2 (continued) Requirement 3 Prepare the April 30 General Journal adjusting entry to record depreciation of the office building for the month of April. Requirement 4 Prepare the General Journal entry to record the purchase of the new computer system on May 1. Requirement 5 Calculate the amount of monthly depreciation for the new computer system. Requirement 6 Prepare the May 31 General Journal adjusting entry to record depreciation of the computer system for the month of May. Requirement 7 Prepare the May 31 General Journal adjusting entry to record depreciation of the office building for the month of May. Requirement 8 Ace prepares financial statements monthly. Assuming that these are Ace’s only two items of Property, Plant, & Equipment, what would be the amount of Depreciation Expense on Ace’s May Income Statement?
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.
I already got Requirment 1, 2 & 3 answered and you please provide answers to the rest of the requirments.
Recently the Ace Manufacturing Company purchased an office building and a new computer
system. Below is the information about these two new items of Property, Plant, & Equipment.
The following are the facts for the office building:
Date on which the building was purchased .... April 1, 2021
Purchase price ............................................... $1,800,000
Method of payment ........................................ paid $300,000 cash – signed a note for
the remainder of the purchase price
Estimated life ................................................. 50 years
Estimated value at the end of 50 years .......... $0
The following are the facts for the computer system:
Date on which computer was purchased ........ May 1, 2021
Purchase price ............................................... $58,800
Method of payment ........................................ Cash
Estimated life ................................................. 7 years
Estimated value at the end of 7 years ............ $0
Depreciation method ...................................... Straight-Line
The following is a partial list of the accounts in Ace’s General Ledger. These are the only accounts
you need for this problem.
Cash
Building (asset account)
Computer (asset account)
Accumulated Depreciation–Computer
Note Payable
Depreciation Expense
Requirement 1
Prepare the General
Requirement 2
Calculate the amount of monthly depreciation for the new building. Chapter 7 –
Problem 7-2 (continued)
Requirement 3
Prepare the April 30 General Journal adjusting entry to record depreciation of the office building
for the month of April.
Requirement 4
Prepare the General Journal entry to record the purchase of the new computer system on
May 1.
Requirement 5
Calculate the amount of monthly depreciation for the new computer system.
Requirement 6
Prepare the May 31 General Journal adjusting entry to record depreciation of the computer
system for the month of May.
Requirement 7
Prepare the May 31 General Journal adjusting entry to record depreciation of the office building
for the month of May.
Requirement 8
Ace prepares financial statements monthly. Assuming that these are Ace’s only two items of
Property, Plant, & Equipment, what would be the amount of Depreciation Expense on Ace’s
May Income Statement?
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