For each separate case below, follow the three-step process for adjusting the ac
ID: 2337123 • Letter: F
Question
For each separate case below, follow the three-step process for adjusting the accumulated depreciation account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step2. Assume no other adjusting entries are made during the year a. Accumulated Depreciation. The Krug Company's Accumulated Depreciation account has a $17,500 balance to start the year. A review of depreciation schedules reveals that $19,400 of depreciation expense must be recorded for the year Accumulated depreciation Step 1: Determine what the current account balance equals Step 2: Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.Explanation / Answer
a)
Accumulated Depreciation
Step 1
Determine what the current account balance equals
$ 17,500.00
$ 17,500.00
Step 2
Determine what the Current balance should Equal
$ 36,900.00
$ 19,400.00
Step 3
record the December 31st Adjusting entry to get from step 1 to step 2
$ 19,400.00
$ 36,900.00
December 31st
Depreciation Expense
$ 15,500.00
Accumulated Depreciation
$ 15,500.00
(Depreciation for the year recorded)
b)
Accumulated Depreciation-truck
Step 1
Determine what the current account balance equals
$ 10,400.00
$ 0.00
Step 2
Determine what the Current balance should Equal
$ 10,400.00
$ 10,400.00
Step 3
record the December 31st Adjusting entry to get from step 1 to step 2
$ 10,400.00
$ 10,400.00
December 31st
Depreciation Expense-Truck
$ 10,400.00
Accumulated Depreciation-Truck
$ 10,400.00
(Depreciation for the year recorded)
c)
Accumulated Depreciation-Equipment
Step 1
Determine what the current account balance equals
$ 5,714.29
$ 0.00
Step 2
Determine what the Current balance should Equal
$ 5,714.29
$ 5,714.29
Step 3
record the December 31st Adjusting entry to get from step 1 to step 2
$ 5,714.29
$ 5,714.29
December 31st
Depreciation Expense-Equipment
$ 5,714.29
Accumulated Depreciation-Equipment
$ 5,714.29
(Depreciation for the year recorded)
Working note
Depreciation calculations
Straight line Method-Truck
A
Cost
$ 52,000.00
B
Residual Value
$ -
C=A - B
Depreciable base
$ 52,000.00
D
Life [in years]
5
E=C/D
Annual SLM depreciation
$ 10,400.00
Straight line Method-Equipment
A
Cost
$ 48,000.00
B
Residual Value
$ 8,000.00
C=A - B
Depreciable base
$ 40,000.00
D
Life [in years]
7
E=C/D
Annual SLM depreciation
$ 5,714.29
a)
Accumulated Depreciation
Step 1
Determine what the current account balance equals
$ 17,500.00
$ 17,500.00
Step 2
Determine what the Current balance should Equal
$ 36,900.00
$ 19,400.00
Step 3
record the December 31st Adjusting entry to get from step 1 to step 2
$ 19,400.00
$ 36,900.00
December 31st
Depreciation Expense
$ 15,500.00
Accumulated Depreciation
$ 15,500.00
(Depreciation for the year recorded)
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