Viking Company purchased and installed carpet in its new general offices on June 30 for a total
Question:
Viking Company purchased and installed carpet in its new general offices on June 30 for a total cost of $15,000. The carpet is estimated to have a 12-year useful life and no residual value.
a. Prepare the journal entries necessary for recording the purchase of the new carpet.
b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Viking Company uses the straight-line method.
Step by Step Answer:
a June 30 Carpet 15000 Cash 15000 b Dec 31 Depreciation ...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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