Super Clean Dry Cleaning purchased a new piece of office equipment on January 1, 2009, for $18,000
Question:
Super Clean Dry Cleaning purchased a new piece of office equipment on January 1, 2009, for $18,000 cash. The company expects to use the equipment for three years and thinks it will be worthless at the end of the three-year period. The company depreciates the equipment in equal annual amounts.
Requirements
1. Show the adjustments in an accounting equation worksheet for the first two years of depreciation.
2. Prepare the asset section of the balance sheet at December 31, 2009, and December 31, 2010, after appropriate adjustments.
3. What amount of depreciation expense will be shown on the income statement for the year ended December 31, 2009? What amount will be shown for the year ended December 31, 2010?
4. Calculate the total depreciation for the life of the asset. What do you notice about the book value of the asset at the end of its useful life?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
1 2 3 Depreciation expense will be the same every year 6000 Book value is zer...View the full answer
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
