Westfair Foods Partial Balance Sheet December 31, 2023 1 The machinery was purchased on January 1, 2018, and is depreciated to the nearest whole month using the straight-line method. Its total estimated useful life is eight years with a $60,000
Westfair Foods Partial Balance Sheet December 31, 2023
1The machinery was purchased on January 1, 2018, and is depreciated to the nearest whole month using the straight-line method. Its total estimated useful life is eight years with a $60,000 residual value.2The equipment was purchased on August 1, 2021, and is depreciated to the nearest whole month using the double-declining-balance method. The useful life is estimated to be four years with a residual value of $36,000.
1. Calculate and record depreciation for the year ended December 31, 2024, for both the machinery and equipment (round calculations to the nearest whole dollar).
2. Prepare the property, plant, and equipment section of the balance sheet at December 31, 2024.
Property, plant, and equipment: Machinery¹ Less: Accumulated depreciation Equipment² Less: Accumulated depreciation Total property, plant, and equipment $ 500,000 330,000 1,280,000 1.026,667 $170,000 253,333 $423,333
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Part 1 2024 Dec 31 Part 2 Depreciation Expense Machinery …View the full answer
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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