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Preparing a Depreciation Schedule and Journalizing the Depreciation Adjusting Entry
Chapter 23, Problem 23-5(choose chapter or problem)
Preparing a Depreciation Schedule and Journalizing the Depreciation Adjusting Entry
Quade Corporation bought a copy machine on January 7 of the current year for $2,360. It has an estimated useful life of five years and an estimated disposal value of $100.
Instructions In your working papers:
1. Prepare a depreciation schedule for the copy machine using the straight-line method of depreciation. (Use the form provided in your working papers.)
2. Journalize the adjustment for the copy machine’s depreciation at the end of the first year.
3. Journalize the closing entry for the expense account affected by the adjusting entry.
4. What is the book value of the asset after five years? Is this the same as the disposal value?
Questions & Answers
QUESTION:
Preparing a Depreciation Schedule and Journalizing the Depreciation Adjusting Entry
Quade Corporation bought a copy machine on January 7 of the current year for $2,360. It has an estimated useful life of five years and an estimated disposal value of $100.
Instructions In your working papers:
1. Prepare a depreciation schedule for the copy machine using the straight-line method of depreciation. (Use the form provided in your working papers.)
2. Journalize the adjustment for the copy machine’s depreciation at the end of the first year.
3. Journalize the closing entry for the expense account affected by the adjusting entry.
4. What is the book value of the asset after five years? Is this the same as the disposal value?
ANSWER:Step 1 of 3
The straight-line method is a method of calculating depreciation expense in which the amount to be depreciated is divided by the estimated useful life.