Jasmine Company purchased equipment on January 1, 20x1. This is the only equipme
ID: 2535457 • Letter: J
Question
Jasmine Company purchased equipment on January 1, 20x1. This is the only equipment that Jasmine company owns. The following information relates to this equipment:
Jasmine Company would report $ of depreciation expense in its December 31, 20x1 income statement and $ of depreciation expense in its December 31, 20x2 income statement.
Recording in the Accounting System
Prepare the journal entry that Jasmine would make to record depreciation on December 31, 20x1:
Prepare the journal entry that Jasmine would make to record depreciation on December 31, 20x2:
The journal entry to record depreciation expense is . At December 31, 20x1, Jasmine Company would report equipment on its balance sheet at $, which is the .
Initial cost $320,000 Estimated residual value $19,000 Expected useful life 8 years Estimated hours of useful life 22,000 hours Depreciation method Straight-line Hours operated during 20x1 2,400 hours Hours operated during 20x2 2,000 hoursExplanation / Answer
Answers
A
Cost
$ 3,20,000.00
B
Residual Value
$ 19,000.00
C=A - B
Depreciable base
$ 3,01,000.00
D
Life [in years]
8
E=C/D
Annual SLM depreciation
$ 37,625.00
Year
Book Value
Depreciation expense
Ending Book Value
Accumulated Depreciation
1
$ 3,20,000.00
$ 37,625.00
$ 2,82,375.00
$ 37,625.00
2
$ 2,82,375.00
$ 37,625.00
$ 2,44,750.00
$ 75,250.00
Date
Accounts title
Debit
Credit
Dec 31 20x1
Depreciation expense-Equipment
$ 37,625.00
Accumulated Depreciation - Equipment
$ 37,625.00
(depreciation expense recorded)
Dec 31 20x2
Depreciation expense-Equipment
$ 37,625.00
Accumulated Depreciation - Equipment
$ 37,625.00
(depreciation expense recorded)
Accumulated Depreciation:
20x1
$ 37,625.00
20x2
$ 37,625.00
Total
$ 75,250.00
BALANCE SHEET
ASSETS:
20x1
20x2
Plant property & Equipment
Equipment
$ 3,20,000.00
320000
Less: Accumulated Depreciation-Equipment
$ 37,625.00
75250
Equipment, net
$ 3,57,625.00
$ 3,95,250.00
A
Cost
$ 3,20,000.00
B
Residual Value
$ 19,000.00
C=A - B
Depreciable base
$ 3,01,000.00
D
Life [in years]
8
E=C/D
Annual SLM depreciation
$ 37,625.00
Year
Book Value
Depreciation expense
Ending Book Value
Accumulated Depreciation
1
$ 3,20,000.00
$ 37,625.00
$ 2,82,375.00
$ 37,625.00
2
$ 2,82,375.00
$ 37,625.00
$ 2,44,750.00
$ 75,250.00
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