Barton Enterprises purchased equipment on January 1, 2014, at a cost of $350,000. Barton uses the straight-line
Question:
Barton Enterprises purchased equipment on January 1, 2014, at a cost of $350,000. Barton uses the straight-line depreciation method, a 5-year estimated useful life, and no residual value. At the end of 2014, independent appraisers determined that the assets have a fair value of $320,000.
Instructions
(a) Prepare the journal entry to record 2014 depreciation using the straight-line method.
(b) Prepare the journal entry to record the revaluation of the equipment.
(c) Prepare the journal entry to record 2015 depreciation, assuming no additional revaluation.
Step by Step Answer:
a Depreciation Expense 70000 Accumulated Depreciati...View the full answer
Financial Accounting IFRS
ISBN: 978-1118285909
2nd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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