On January 2, 2022, Pet Spa purchased fixtures for $37,800 cash, expecting the fixtures to remain in
Question:
On January 2, 2022, Pet Spa purchased fixtures for $37,800 cash, expecting the fixtures to remain in service for six years. Pet Spa has depreciated the fixtures on a straight-line basis, with $9,000 residual value. On May 31, 2024, Pet Spa sold the fixtures for $24,200 cash. Record both depreciation expense for 2024 and sale of the fixtures on May 31, 2024.
Step by Step Answer:
Straightline depreciation Cost Residual value Useful life 31 Ca...View the full answer
Horngrens Accounting The Financial Chapters
ISBN: 9780136162186
13th Edition
Authors: Tracie Miller Nobles, Brenda Mattison
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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