Accounting

Homework Help Latest DiscussionsDiscussion

On January 1, 2006, Mythical purchased some office equipment, paying $24,000. It is anticipated that the equipment will last 4 years and have a zero salvage value at the end of the four years. 1) Make the adjusting entry for depreciation at the end of year two using the straight-line method. 2) Make the adjusting entry at the end of year two using the double declining balance. Assume that Mythical purchased a new copy machine, paying $10,000. It is estimated that the machine will produce 100,000 copies and then be worthless. In year two, the machine was used to make 4,000 copies. Make the adjusting entry to record depreciation expense.

Started by Patrick Nelson ( Eternity Cosmetology School )

Answers

1) Debit Depreciation Expense - 6,000 Credit Accumulated Depreciation - Office Equipment - 6,000 2) Debit Depreciation Expense - 12,000 Credit Accumulated Depreciation - Office Equipment - 12,000 Debit Depreciation Expense - 4,000 Credit Accumulated Depreciation - Copymachine - 4,000 Explanation: The adjusting entry for year two for the office equipment would be different when using the straight-line method compared to the double declining balance. The entry for the copy machine would be the same regardless of the method used, as the double declining balance would have the same effect as the straight-line method in a situation where there is only one year of use. The entry is recorded to record an expense related to the machine's inability to produce copies, due to use and wear and tear from the past year.

Answered by Taylor Torres

Answers

We have mentors from