Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2022. The equipment is being
Question:
Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2022. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $300,000. At the beginning of 2024 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment.
Required:
Prepare the journal entry to record depreciation for the year ended December 31, 2024.
Step by Step Answer:
DDB depreciation 2022 1500000 210 2023 1500000300000 210 1500000 Cost 540000 9600...View the full answer
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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