The estimated amount of depreciation on equipment for the current year is $6,475. Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.
The estimated amount of depreciation on equipment for the current year is $6,475. Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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The estimated amount of depreciation on equipment for the current year is $6,475.
Journalize the adjusting entry to record the depreciation. Refer to the Chart of Accounts for exact wording of account titles.
![ASSETS
REVENUE
11 Cash
41 Fees Earned
12 Accounts Receivable
13 Supplies
EXPENSES
14 Prepaid Insurance
51 Advertising Expense
15 Land
52 Insurance Expense
16 Equipment
53 Rent Expense
17 Accumulated Depreciation-Equipment
54 Salary Expense
55 Supplies Expense
LIABILITIES
56 Utilities Expense
21 Accounts Payable
57 Depreciation Expense
22 Unearned Fees
59 Miscellaneous Expense
23 Salaries Payable
24 Taxes Payable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fea841f3c-b458-49a1-935c-fddd447f9930%2Fd87b891a-996f-4433-8aca-2cd9d3773df3%2F7xsyvla_processed.png&w=3840&q=75)
Transcribed Image Text:ASSETS
REVENUE
11 Cash
41 Fees Earned
12 Accounts Receivable
13 Supplies
EXPENSES
14 Prepaid Insurance
51 Advertising Expense
15 Land
52 Insurance Expense
16 Equipment
53 Rent Expense
17 Accumulated Depreciation-Equipment
54 Salary Expense
55 Supplies Expense
LIABILITIES
56 Utilities Expense
21 Accounts Payable
57 Depreciation Expense
22 Unearned Fees
59 Miscellaneous Expense
23 Salaries Payable
24 Taxes Payable
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