On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not recorded any adjustments relating to this equipment during the current year. Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering dollar amounts in the debit and credit columns.

Name: Knowledge Check 01On January 1, the company purchased equipment that
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Description: Knowledge Check 01On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has asalvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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

Knowledge Check 01
On January 1, the company purchased equipment that cost $10,000. The equipment is expected to be worth about (or has a
salvage value of) $1,000 at the end of its useful life in five years. The company uses straight-line depreciation. It has not
recorded any adjustments relating to this equipment during the current year.
View transaction list View journal entry worksheet
Complete the necessary December 31 journal entry by selecting the account names from the pull-down menus and entering
dollar amounts in the debit and credit columns.
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