Exercise $3-5$ Preparing adjusting entries $($annual$)-$depreciation $104$

Mean Beans, a local coffee shop, has the following assets on January $1,2023.$ Mean Beans prepares annual

financial statements and has a December $31,2023$ year$-$end. The company's depreciation policy is to use the

straight$-$line method to depreciate its assets.

a$.$ On January $1,2023,$ purchase equipment costing $$15,000$ with an estimated life of five years. Mean Beans

will scrap the equipment after five years for $$0.$

b$.$ On July $1,2023,$ purchase furniture $($tables and chairs$)$ costing $$12,000$ with an estimated life of ten years.

Mean Beans estimates that it can sell the furniture for $$2,000$ after ten years.

c$.$ On January $1,2021,$ Mean Beans had purchased a car costing $$25,000$ with an estimated life of eight years.

Mean Beans estimates that it can sell the car for $$5,000$ after eight years.

Required

For each transaction, calculate the annual depreciation expense and record the adjusting entry on

December $31,2023.$

For the car, determine the accumulated depreciation as of December $31,2023.$

For the car, determine the carrying amount as of December $31>0>2$