Details regarding Leroux Steel’s purchases of plant and equipment items during 2020 follow:

Required 

Prepare the annual adjusting entry at December 31, 2020, Leroux’s year-end, for each plant and  equipment item. Assume Leroux Steel uses the straight-line method to depreciate its assets.

Analysis Component: 

What is the purpose of recording depreciation? If depreciation is not recorded, how would the income statement be affected?

Transcribed Image Text:

Date of Purchase a. Jan. 1 b. Apr. 1 c. Nov. 1 Plant and Equipment Item Machine A Machine B Machine C Cost $102,000 61,000 30,500 Estimated Useful Life 5 years 4 years 2 years Estimated Sales Value at End of Estimated Useful Life $ -0- 3,400 2,900