Question

On January 1, 2017, Wesley's Machining & Welding, Inc. (WMW) purchased equipment for $62,000. It cost an additional $3,000 to deliver, install, and calibrate the equipment. This machine has a service life of 5 years, at which time it is expected that the device will be scrapped for a $5,000 salvage value.

WMW uses the straight-line depreciation method. Use the attached worksheet to complete the following:

• Prepare a worksheet to determine annual depreciation.
• Prepare a depreciation schedule showing annual depreciation expense, accumulated depreciation, and related calculations for each year.
• Show how the asset and related accumulated depreciation would appear on a balance sheet at December 31, 2020.

a) Worksheet
Equipment Depreciation Worksheet
Cost of Equipment (including delivery, set-up)
Less: Estimated residual value
Total to be depreciated			$                -
Estimated useful life
Annual depreciation expense			#DIV/0!
b) Depreciation Schedule
Equipment Depreciation Schedule-Straight Line
Year	Annual Expense	Accumulated Depreciation at End of Year	Book Value
			$                -
2017	#DIV/0!
2018
2019
2020
2021
c) Balance Sheet Entry
Property, Plant & Equipment (Dec. 31, 2020)
Equipment
Less: Accumulated depreciation

Answer 1