Please don't provide answer in image format thank you. 1. On December 31 of Year 4, Mateo Company is preparing adjusting entries for its annual year-end. Equipment #1A with a cost of $8,000 was purchased on January 1 of Year 2. It is being depreciated on a straight-line basis over an estimated useful life of 10 years with no residual value. At December 31 of Year 4, it has been determined that the estimated total useful life is 6 years instead of 10. For equipment #1A, provide the required adjusting entry for depreciation expense at December 31 of Year 4. 2. In Year 8, Talon Inc. decided to change inventory methods from the weighted-average method to the FIFO method. Net income reported in Year 7 applying the weighted-average method was $100,000. If FIFO had been applied in Year 7, net income would have been $108,000. In reporting comparative income statements in Year 8, what net income amount is presented for Year 7?
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.
Please don't provide answer in image format thank you.
1. On December 31 of Year 4, Mateo Company is preparing
For equipment #1A, provide the required adjusting entry for depreciation expense at December 31 of Year 4.
2. In Year 8, Talon Inc. decided to change inventory methods from the weighted-average method to the FIFO method. Net income reported in Year 7 applying the weighted-average method was $100,000. If FIFO had been applied in Year 7, net income would have been $108,000.
In reporting comparative income statements in Year 8, what net income amount is presented for Year 7?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
