Tangible assets that are long term or non-current usually require depreciation entries, What specific information is...

Tangible assets that are long term or non-current usually require depreciation entries, What specific information is required to make the period end adjusting entry? What is the adjusting entry for depreciation of non-current assets?

Expert Solution

First, the company needs to decide which depreciation method they want to use in their books of accounts, on the basis of which further information required would be gathered. Various depreciation methods and the information required are:

1. Straight-line: Spreads the cost of the long term asset evenly over its useful life. Information required: Useful life, salvage value, cost of the asset.

2. Double Declining method: It is an accelerated method of depreciation which results in higher depreciation in the earlier years of asset's life. Information required: Useful life, book value of the asset at the beginning of the accounting period.

3. Units-of-production: It is used when an asset's value is more closely related to the number of units it produces rather than the number of years it is in use. Information required: total units to be produced, units produced in the current year, salvage value, cost of the asset.

Adjusting entry for depreciation:

Depreciation Expense-Non current asset Dr. xxx

To accumulated Depreciation-Non current asset xxx

ekkarill92 answered 2 years ago

Depreciation by Two Methods; Sale of Long-term or relatively permanent tangible assets such as equipment, machinery,...

Depreciation by Two Methods; Sale of Long-term or relatively permanent tangible assets such as equipment, machinery, and buildings that are used in the normal business operations and that depreciate over time.Fixed Asset New tire retreading equipment, acquired at a cost of $718,750 on September 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated The estimated value of a fixed asset at the end of its useful life.residual value of $61,800....

Distinguish between Current/Short term Liabilities and Non-current/Long term Liabilities. Illustrate your answer with journal entries as...

Distinguish between Current/Short term Liabilities and Non-current/Long term Liabilities. Illustrate your answer with journal entries as examples.

What are the similarities of non-current assets and depreciation between GAAP and IFRS ?

What is depreciation? Which tangible assets in IT are depreciated and which are not? Why?

Why it is necessary to depreciate long-term tangible assets and amortize intangible assets with finite lives?...

Why it is necessary to depreciate long-term tangible assets and amortize intangible assets with finite lives? Which principle do these practices (depreciation and amortization) satisfy?

Solve for the missing numbers. Total Assets _ , Other Non-Current Liabilities _ , Long Term...

Solve for the missing numbers. Total Assets _________ , Other Non-Current Liabilities _________ , Long Term Intangibles ________ , Income Taxes Payable _______ , Selling General & Admin Expense ________ , Accounts Receivable ______ , Income Tax Expense ______ , Cost Of Goods Sold ________ , Net Property, Plant & Equipment _______ , Interest Expense _________ , Revenue 17,656, Prepaid Expenses 294, Additional Paid In Capital 23,314, Long-term Investments 453, Gross Profit 10,003, Goodwill 30,475, Gross Property, Plant & Equipment...

A firm has $200,000 in current assets, $800,000 in long-term assets and $900,000 in long-term financing....

A firm has $200,000 in current assets, $800,000 in long-term assets and $900,000 in long-term financing. What is its net working capital (CA -CL)? Hint: Prepare a Balance Sheet.

For tangible non-current assets, identify FIVE risks of misstatement in the financial statements. For each risk...

For tangible non-current assets, identify FIVE risks of misstatement in the financial statements. For each risk given, identify the financial statement assertion which it affects, and describe a test which could be undertaken to gather evidence in relation to that risk/related assertion. (You should present your answer in two columns headed “risk/related assertion”, and “test”).

Acquisition and depreciation of long-term assets are important to understand because these assets represent a business's...

Acquisition and depreciation of long-term assets are important to understand because these assets represent a business's largest investment of resources. Recording the correct cost for an asset can be difficult because there are many costs associated with the purchase or construction of tangible property, and there are many legal fees associated with the purchase of real property. After assets have been acquired or constructed, they can be depreciated over a period of time. Depreciation is not meant to show the...

The following is 2011.1.1 of Listed company A. Information on tangible and tangible assets. Cost of...

The following is 2011.1.1 of Listed company A. Information on tangible and tangible assets. Cost of Acquisition: ₩ 500,000 Service life 10 years Residual value: 100,000 Estimated production: 100,000 units Estimated working time: 25,000 hours Calculate the depreciation cost of 2012.12.31. 1. straight line method 2. Training Sum Method 3. Proportion proportional method (actual production: x1: 20,000; x2: 30,000; x3: 25,000) 4. Double Sense Balance Method 5. Working time proportional method (actual working time: x1: 3,000; x2: 2,000; x3: 2,000...

Question