Recent historical actual depreciation figures and other information:   Actual depreciation expense for the the entire year 2017 was $750,000.   Actual depreciation expense for the the entire year 2018 was $675,000.   Actual depreciation expense for the the entire year 2019 was $630,000.   The company acquired $140,000 in fixed assets in 2020, all are to be depreciated straight-line over seven years.   Assume all items acquired in 2020 have no salvage value, were all acquired on 1/1/2020, and a full year of depreciation is taken in Year 1 and Year 5      

Questions   

a) What journal entry do you propose Wayne should record each month, January through November, 2020?   Explain how you arrived at the amount you did, and show calculations to support your figure.   

b) Assume Wayne's final actual 2020 depreciation expense, determined in January 2021 is $790,000.   What final adjusting journal entry should be recorded in December 2020 to "true-up" depreciation expense recorded for the year?

Answer rating: 100% (QA)

a To calculate the monthly depreciation expense for the fixed assets acquired in 2020 we first need to determine the depreciable amount and the annual ... View the full answer