Question

Show your work when solving please

The company bought new equipment and provide you with the data

Date of purchase 2 Jan 17

Cost of Equipment $53,000

Salvage Value $3,000

Use of life $3000

Depreciation 5 years

Method straight line

1. Prepare depreciation schedule for equipment
2. Prepare the depreciation journal entry for March 2018
3. Determine the book value of equipment Dec 31 2021

Answer 1

Ans a)	Depreciation schedule
		Total Cost	$53,000.00
		Expected Life (in years)	5
		Salvage Value	$3,000.00
		Total Depreciation	$50,000.00
	Depreciation Schedule: Straight-Line Method
	Year	Rate	Depreciation	Accumulated Depreciation	Book Value
	0		$0.00	$0.00	$53,000.00
	2017	20%	$10,000	$10,000	$43,000
	2018	20%	$10,000	$20,000	$33,000
	2019	20%	$10,000	$30,000	$23,000
	2020	20%	$10,000	$40,000	$13,000
	2021	20%	$10,000	$50,000	$3,000
Ans b)	Journal entry
					Dr	Cr
	Depreciation on equipment		$10,000
	To accumulated depreciation on equipment		$10,000
Ans c)	Book value at the end of 2021 =		$3,000