Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

5th Edition

ISBN: 9780134078908

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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Textbook Question

Chapter 3, Problem 3.8SE

Journalizing and posting an adjusting entry for depreciation and determining book value

On May 1, Chicago Gold Exchange paid cash of $28,800 for computers that are expected to remain useful for four years. At the end of four years, the value of the computers is expected to be zero.

Requirements

1. Calculate the amount of depreciation for the month of May using the straight-line depreciation method.

2. Record the adjusting entry for depredation on May 31.

3. Post the purchase of May 1 and the depreciation on May 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation—Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at May 31.

4. What is the computer equipment’s book value on May 31?

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Chapter 3, Problem 3.7SE

Chapter 3, Problem 3.9SE

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Horngren's Financial & Managerial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)

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Solution Summary: The author calculates the amount of depreciation for the month of May, using the straight-line deprecation method.

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