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

Expert Solution

ekkarill92 answered 3 years ago

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