How to obtain the accumulated depreciate - Training equipment = $34,100? How to balance the adjusted...

How to obtain the accumulated depreciate - Training equipment = $34,100?

How to balance the adjusted trail balance?

On 1 October, Hercules Ho sold a treadmill that costs $5,000, with accumulated depreciation of $2,000 as at 31 Dec 2017 for cash of $3,000. Hercules Ho deposited the cash into his personal bank account. Hercules Ho forgot to inform his accountant of this transaction. According to him, the cash taken by him was to be treated as a loan to him.
Both the cost of the treadmill and the accumulated depreciation were included in the amount shown for training equipment at cost and the accumulated depreciation for training equipment in the unadjusted trial balance above. The residual value of the treadmill was originally estimated to be $500.

No depreciation has been charged for the year ended 31 Dec 2018. During the year, no additional non-current assets was purchased. The company depreciates non-current assets held at 31 Dec 2018 as follows:
 Training equipment at cost - straight line over five years. The residual value of the training equipment at cost was estimated to be $15,000.

Account	Unadjusted Trial Balance		Adjusted Trial Balance
	Dr. ($)	Cr. ($)	Dr. ($)	Cr. ($)
Share capital		125,000		125,000
Retained earning, 31 Dec 2017		24,688		24,688
Training equipment at cost	125,000		120,000
Furniture and fittings at cost	50,000		50,000
Accumulated deperation, 31 Dec 2017
- Training equipment		15,000		34,100
-Furniture and fittings		10,000		30,000
Prepaid insurance	9,000		9,000
Rental expense	162,500		162,500
Insurance expense	6,750		6,750
Membership fee received		302,113		296,988
Unearned membership fees				5,125
General expenses	5,090		5,090
Bad debt expense
Wages and salaries	49,850		52,338
Wages and salaries payable				2,488
Depreciation expense			41,775
Equipment maintenance expense	13,580		13,580
Interest and bank charges	110		210
Allowance for doubtful debts	195		577
Accounts receivable	7,643		7,261
Accounts payable		3,125		3,125
Hercules Ho capital			3,000
Bank	50,208		50,108
	479,926	479,926	522189	521,514

Expert Solution

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Sold Trademill

Depreciation for 9 Months ($5,000-$500)/5 Years*9/12		$ 675
Accumulated Depreciaton up to 31st Dec 2016		$ 2,000
Accumulated Depreciation to be reversed		$ 2,675

Balance of Equipment

Training Equipment Cost (From Trial)		$125,000
Less: Sold		$ -5,000
Remaining Equipment		$120,000
Salvage Value ($15,000-$500 Sold Equipment)		$ 14,500

Depreciation for the Year ($120,000-$14,500)/5 Year		$ 21,100
Deprecation for 9 Months on Sold Equipment		$ 675
Total Accumulated Depreciation to be added		$ 21,775


Beginning balance of Acc Dep		$ 15,000
Add: Depreciation for the year		$ 21,775
Less: Depreciation to be reversed on sold equipment		$ -2,675
Ending balance of Acc dep		$ 34,100

ekkarill92 answered 2 months ago

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