Question
In: Accounting
On March 31, 2015, the company purchased a office furniture for $168,000 which is expected to...
On March 31, 2015, the company purchased a office furniture for $168,000 which is expected to last 7. The company only records depreciation at the end of the year. (Use your fingers to count the months.)
The adjusting journal entry on December 31, 2015 is:
Solutions
Expert Solution
Suppose the company uses straight line Depreciation method, annual depreciation will be
Straight Line method
Annual Depreciation = (Machine cost - salvage value)/ useful years
Annual Depreciation= (168000 - 0)/ 7
= (168000)/ 7
= 24000
Since the machine was purchased on 31 march, depreciation will be applied for 9 month only,
SO Depreciation expense for 2015 will be = 24000/12 * 9
= 2000* 9
= 18000
Journal entry will be
Depreciation Expense Dr – 18000
Accumulated depreciation Cr - 18000
--------------------------------------------------------------------------------------------------------------------------
Hope that helps.
Feel free to comment if you need further assistance J
ekkarill92 answered 1 year agoRelated Solutions
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