Try another version of this question
Assume that All You Can Eat Catering paid $23,000 for equipment with a 10 year life and zero expected residual value.
After using the equipment for 4 years, the company determines that the asset will remain useful for only 3 more years.
1. Record depreciation expense on the equipment for year 5 by the straight-line method.
Straight-line
Straight-line Method = (Cost - Residual Value)/(Time) = Depreciation per year
Straight-line Method = -/ = per year
Accumulated depreciation after 4 years
Depreciation x Years = Amount after 4 years
x =
Book value after 4 years
Book Value - Accum. Depr. = Book Value
- =
Revised depreciation
Straight-line Method = (Cost - Residual Value)/(Time) = Depreciation per year
Straight-line Method = -/ = per year
| Date | Description | Debit | Credit |
|---|---|---|---|
2. What is accumulated depreciation at the end of year 5?
| Straight-line | |
|---|---|
| Depreciation Expense - years 1- 4 | |
| Depreciation Expense - year 5 | |
| Total Accumulated Depreciation |
| Date | Description | Debit | Credit |
|---|---|---|---|
| Depreciation Expense | 4,600 | ||
| Accumulated Depr-Equipment | 4,600 |
| Straight-line | |
|---|---|
| Depreciation Expense - years 1- 4 | 9,200 |
| Depreciation Expense - year 5 | 4,600 |
| Total Accumulated Depreciation | 13,800 |