d a temporary account e. a contra asset. 5. Climate Co. purchases equipment on J
ID: 2571153 • Letter: D
Question
d a temporary account e. a contra asset. 5. Climate Co. purchases equipment on July 1, 2017 for $102,000. The estimated useful life is ten years a hours. The estimated salvage value of the equipment is $2.000. The company uses the straight-line depreciation method. Calculate the depreciation expense to be recorded in an adjusting journal entry on December 31, 2017 a. $9,600 b. $10,000 c. $10.400 d. $20,000 e. None of these 6. What is the normal balance of the Allowance for Doubtful Accounts? c. cannot be determined d. e. slightly to the left It is unbalanced. declining balance method is the most commonly used depreciation method in US companies. c. d. Per e. Only on SExplanation / Answer
5.
Cost of machine = $102,000
Salvage value = $2,000
Useful life = 10 years
Therefore,
Annual depreciation = (Cost - Salvage value)/Useful life = ($102,000-$2,000)/10 = $10,000
Thus,
Depreciation for 6 months, July 1 to December 31 = $10,000/2 = $5,000
The correct answer is e. none of these
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