On January 2, 2018, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2022, Moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000. a. Prepare a journal entry to record depreciation expense on the equipment for 2022. Round your answer to the nearest dollar. General Journal Debit Credit Dec. 31 Answer Answer Answer Answer Answer Answer To record depreciation expense. b. What is the book value of the equipment at the end of 2022 (after recording the depreciation expense for 2022)? Book Value at year ended December 31, 2022: $Answer
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.
Revision of
On January 2, 2018, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2022, Moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000.
a. Prepare a
General Journal | |||
---|---|---|---|
Debit | Credit | ||
Dec. 31 | Answer | Answer | Answer |
Answer | Answer | Answer | |
To record depreciation expense. |
b. What is the book value of the equipment at the end of 2022 (after recording the depreciation expense for 2022)?
Book Value at year ended December 31, 2022: $Answer
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