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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