century 21 accounting © thomson/south-western lesson 8-2 calculating and journalizing depreciation...
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CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 8-2LESSON 8-2
Calculating and Journalizing Depreciation Expense
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 8-2
Ending Book Value
=Annual Depreciation
–Beginning Book Value
Year 3 $1,270.00 – $365.00 = $905.00
STRAIGHT-LINE DEPRECIATIONSTRAIGHT-LINE DEPRECIATION page 230
Original Cost $2,000.00– Estimated Salvage Value – 175.00= Estimated Total Depreciation Expense $1,825.00 Years of Estimated Useful Life 5= Annual Depreciation Expense $ 365.00
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 8-2
RECORDING DEPRECIATION ON RECORDING DEPRECIATION ON PLANT ASSET RECORDSPLANT ASSET RECORDS
2. Calculate accumulated depreciation.3. Calculate ending book value.
1. Calculate annual depreciation expense.
page 231
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 8-2
Depreciation Expense—Office Equipment
Jan. 1 Bal. 37,434.00Dec. 31 Adj. 11,571.00Dec. 31 Bal. 49,005.00
Accumulated Depreciation—Office Equipment
Dec. 31 Adj. 11,571.00
JOURNALIZING ANNUAL JOURNALIZING ANNUAL DEPRECIATION EXPENSEDEPRECIATION EXPENSE page 232
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 8-2
CALCULATING DEPRECIATION EXPENSE CALCULATING DEPRECIATION EXPENSE FOR PART OF A YEARFOR PART OF A YEAR page 232
Annual Depreciation Expense $ 120.00
Months in a Year 12
Monthly Depreciation Expense $ 10.00
× Number of Months Asset Is Used × 5
Partial Year’s Depreciation Expense $ 50.00
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CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 8-2
TERMS REVIEWTERMS REVIEW
straight-line method of depreciation book value of a plant asset
page 234