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Recording and Preparing Schedule Using Sum-of-theYears’-Digits Method Depreciation, Partial Year An asset was purchased October 1,...

Recording and Preparing Schedule Using Sum-of-theYears’-Digits Method Depreciation, Partial Year

An asset was purchased October 1, 2020, costing $30,000, with a residual value of $6,000 and an estimated three-year useful life.

Required

a. Prepare a schedule of depreciation that shows annual depreciation expense and year-end accumulated depreciation and book value over the useful life of the asset assuming that the company depreciated the asset using the sum-of-the-years’-digits method.

Note: Round each amount to the nearest dollar.

For the Period End of Period
Reporting
Period		 Depreciation
Expense		 Accumulated
Depreciation		 Book
Value
2020 Answer Answer Answer
2021 Answer Answer Answer
2022 Answer Answer Answer
2023 Answer Answer Answer

b. Record the entry to recognize depreciation in 2020.

Date Account Name Dr. Cr.
Dec. 31, 2020 AnswerCashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings—Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A Answer Answer
AnswerCashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings—Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A Answer Answer

c. Record the entry to recognize depreciation in 2021.

Date Account Name Dr. Cr.
Dec. 31, 2021 AnswerCashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings—Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A Answer Answer
AnswerCashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained Earnings—Prior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A Answer Answer

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