Chapter 11, Problem 11.4P

1.

To determine

Depreciation:

Depreciation refers to the reduction in the monetary value of a fixed asset due to its wear and tear or obsolescence. It is a method of distributing the cost of the fixed assets over its estimated useful life.

Straight-line method:

Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset.

$\text{Depreciation cost = }\frac{\text{Cost of the asset-Salvage value}}{\text{Estimated useful life of the asset}}$

To Prepare: The journal entries for depreciation during the year 2014.

2.

To determine

To Prepare: The journal entries for depreciation expense during the year 2016.

3.

To determine

To Prepare: The journal entries for depreciation during the year 2016.