Adjusting entries : The adjusting entries are recorded at the end to each accounting period to adjust the account as per the accrual concept of accounting. The adjusting entries include adjustment of depreciation , adjustment of payable expenses, and adjustment of receivable revenue. Depreciation schedule: Depreciation schedule is a statement that shows the book value and depreciation on an asset for each year. Straight line method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows: A n n u a l S t r a i g h t l i n e d e p r e c i a t i o n = ( C o s t − S a l v a g e V a l u e ) E s t i m a t e d l i f e i n y e a r s Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula: D o u b l e d e c l i n i n g d e p r e c i a t i o n r a t e = 2 E x p e c t e d l i f e i n y e a r s To determine: The Depreciation Schedules for each asset for first five years

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Chapter 10, Problem 4CP

To determine

Concept Introduction:

Adjusting entries: The adjusting entries are recorded at the end to each accounting period to adjust the account as per the accrual concept of accounting. The adjusting entries include adjustment of depreciation, adjustment of payable expenses, and adjustment of receivable revenue.

Depreciation schedule: Depreciation schedule is a statement that shows the book value and depreciation on an asset for each year.

Straight line method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method the depreciable value of asset it divided equally for each year f its estimated life. The formula to calculate the deprecation under straight line method is as follows:

$A n n u a l S t r a i g h t l i n e d e p r e c i a t i o n = \frac{(C o s t - S a l v a g e V a l u e)}{E s t i m a t e d l i f e i n y e a r s}$

Double Declining balance method of depreciation: This is one of the methods to calculate the depreciation on assets. Under this method, the depreciation is calculated on the beginning book value of depreciation using a depreciation rate. The depreciation rate is calculated with the help of following formula:

$D o u b l e d e c l i n i n g d e p r e c i a t i o n r a t e = \frac{2}{E x p e c t e d l i f e i n y e a r s}$

To determine: The Depreciation Schedules for each asset for first five years

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Belle Garments manufactures customized T-shirts for football teams. The business uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The business operates at a profit margin of 33% on sales. Belle Garments expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labour costs of $3,150,000 during 2025. At the end of December 2024, Belle Line Garments reported work in process inventory of $93,980 - Job FBT 101 - $51,000 & Job FBT 102 - $42,980 The following events occurred during January 2025. i) Purchased materials on account, $388,000. The purchase attracted freight charges of $4,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labour in manufacturing. Job # FBT 101 FBT 102 FBT 103 FBT 104 Direct Materials $70,220 97,500 105,300 117,000 iv) Issued indirect materials to production, $30,000. Direct Labour $61,200…