Question

Beaver Construction purchases new equipment for $33,000 cash on April 1, 2021. At the time of purchase, the equipment is expected to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 60 months ($550/month).

Required:

1. 1.&2. Record the necessary entries in the Journal Entry Worksheet below.

2. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2021 is $0).

Answer 1

1.

2.

3.Accumulated depreciation in year 1 would be equal to the depreciation expenss insurred and thus year end adjauted balance ahould be same for both the accounts.
Depreciation expense=Depreciation per month*No.of months

Depreciation expense=$550*9=$4,950

Thus, year adjusted balance of accumulated depreciation and depreciation expense=$4,950.