P10-42 calculating and journalizing partial year deprearion This problem continu

Question

P10-42 calculating and journalizing partial year deprearion This problem continues to Davis consulting situation from problem P9-41 of chapter 9. Assume Davis consulting had purchased a computer, $1800, and office furniture, $4200, on December 3 and 4, 2014, respectively, and that they were expected to last five years. Assume that both assets have a residual value of $0
Requirements 1. Calculate the amount of depreciation expense for each cash asset for the year ended December 31, 2014, assuming the computer is depreciated using the straight line method and our office furniture is depreciated using the double-declining balance method

Explanation / Answer

1. Calculate the amount of depreciation expense for each cash asset for the year ended December 31, 2014, assuming the computer is depreciated using the straight line method and our office furniture is depreciated using the double-declining balance method

Computer

Depreciation Expenses = (1800-0)/5 * 28/365 = $ 27.62

Office Furrniture

Depreciation Rate = 1/useful life* 2

Depreciation Rate = 1/5*2

Depreciation Rate = 40%

Depreciation Expenses = Cost*Depreciation Rate *27/365

Depreciation Expenses = 4200*40%*27/365

Depreciation Expenses = $ 124.27

2. Record that entry for the one months depreciation.

Journal Entry

Accounts Title & Explaination Debit Credit Depreciation Expenses 27.62 Accumulated Depreciation- Computer 27.62 Depreciation Expenses 124.27 Accumulated Depreciation- Furniture 124.27

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