Capital Expenditure and Depreciation; Parital-Year Depreciation Willow Creek Com

Question

Capital Expenditure and Depreciation; Parital-Year Depreciation Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $6,816. The carpet is estimated to have a 8-year useful life and no residual value. a. Prepare the journal entry necessary for recording the purchase of the new carpet. April 30 b.Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method. Do not round intermediate calculations Dec. 31

Explanation / Answer

a.

April 30 Carpet $ 6,816

Cash $ 6,816

b.

Annual Depreciation= (Cost - Salvage) / Useful Life

= ( $ 6816 -0) / 8

= $ 852

Proportionate Depreciation = Annual Depreciation * 8/ 12

= $ 852 * 8 /12

= $ 568

Hence the correct answer is :

Dec 31 Depreciation $ 568

Accumulated Depreciation $ 568

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.