d. The depreciation expense-computer equipment will be debited, and accumulated depreciation will be credited with $5,600.
e. The depreciation expenses-office equipment will be debited, and accumulated depreciation will be credited with $1,600.
Further Explanation:
Depreciation:
Depreciation refers to the allocation of the cost of the physical asset over the useful life of the asset. The depreciation is a non-cash expense of the business. The value of the asset decreases as the business uses the asset for the operating activities. The normal wear and tear in the value of the asset are recorded as the depreciation. The depreciation can be calculated as follows:
[tex]\begin{aligned}\text{Annual deprecitation}&=\frac{\text{Purchase value}-\text{Salvage value}}{\text{Useful life of the asset}}\end{aligned}[/tex]
Journal entry for the depreciation of computer system and office equipment:
The depreciation expense-computer equipment will be debited, and accumulated depreciation will be credited with $5,600.
The depreciation expenses-office equipment will be debited, and accumulated depreciation will be credited with $1,600.
Working notes:
Calculate the annual deprecation for computer depreciation:
[tex]\begin{aligned}\text{Annual deprecitation-Computer Equipment}&=\frac{\text{Purchase value}-\text{Salvage value}}{\text{Useful life of the asset}}\\&=\frac{\$22,400-\$0}{4}\\&=\$5,600\end{aligned}[/tex]
Calculate the annual depreciation on office equipment:
[tex]\begin{aligned}\text{Annual deprecitation-Office Equipment}&=\frac{\text{Purchase value}-\text{Salvage value}}{\text{Useful life of the asset}}\\&=\frac{\$8,000-\$0}{5}\\&=\$1,600\end{aligned}[/tex]
Learn More:
Answer Details:
Grade: Middle school
Chapter: Depreciation
Subject: Accounting
Keywords: computer, system, acquired, October, expected, have, four-year, life, salvage, value, office, equipment, acquired, October 1, five-year life, no, salvage value.
