Martinez Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you. 1 Martinez purchased equipment on January 2, 2017, for $92,900. At that time, the equipment had an estimated useful life of 10 years with a $4,900 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,900 salvage value. 2 During 2020, Martinez changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $280,000. It had a useful life of 10 years and a salvage value of $28,000. The following computations present depreciation on both bases for 2018 and 2019. 2019 2018 Straight-line $25,200 $25,200 Declining-balance 44,800 56,000 3 Martinez purchased a machine on July 1, 2018, at a cost of $130,000. The machine has a salvage value of $20,000 and a useful life of 8 years. Martinez’s bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the salvage value. Prepare the journal entries to record depreciation expense for 2020 and correct any errors made to date related to the information provided. (Ignore taxes.)

Name: Martinez Company is in the process of preparing its financial statemen
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Martinez Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

Martinez Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you.

1	Martinez purchased equipment on January 2, 2017, for $92,900. At that time, the equipment had an estimated useful life of 10 years with a $4,900 salvage value. The equipment is depreciated on a straight-line basis.
	On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,900 salvage value.
2	During 2020, Martinez changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $280,000. It had a useful life of 10 years and a salvage value of $28,000.
	The following computations present depreciation on both bases for 2018 and 2019.
	2019	2018
Straight-line	$25,200	$25,200
Declining-balance	44,800	56,000

3	Martinez purchased a machine on July 1, 2018, at a cost of $130,000. The machine has a salvage value of $20,000 and a useful life of 8 years. Martinez’s bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the salvage value.

Prepare the journal entries to record depreciation expense for 2020 and correct any errors made to date related to the information provided. (Ignore taxes.)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions