Bakesale Enterprises purchased equipment on May 1, 2015 for $6,300. The company

Question

Bakesale Enterprises purchased equipment on May 1, 2015 for $6,300. The company expects to use the equipment for 5 years. It has no salvage value. What adjusting journal entry should the company make at the end of each month if monthly financials are prepared (annual depreciation is $1,260) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit LINK TO TEXT What is the book value of the equipment at May 31, 2015? Book value of the equipment

Explanation / Answer

Answer:

1

Adjusting entry for depreciation

Account Title and explanation

Debit $

Credit $

Depreciation Expanses

105

Accumulated depreciation

105

Working notes for the answer:

Yearly Monthly depreciation

=6300/5

=1260 per year depreciation

Monthly deprecation

=1260/12

=$105 deprecation per month

___________________________________________________________

2

Book value of the equipment

6195

Working notes for the answer:

cost

6300

Less: Accumulated depreciation

105

Book Value

6195

Account Title and explanation

Debit $

Credit $

Depreciation Expanses

105

Accumulated depreciation

105

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