Question

Beaver Construction purchases new equipment for $36,960 cash on April 1, 2021. At the time of...

Beaver Construction purchases new equipment for $36,960 cash on April 1, 2021. At the time of purchase, the equipment is expected to be used in operations for seven years (84 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 84 months ($440/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).

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Homework Answers

Answer #1

1.

Journal

April 1, 2021 Equipment 36,960
Cash 36,960

2.

Depreciation Expense per month = $440

Depreciation Expense for 9 months (From April 1, 2021 to December 31, 2021) = Depreciation Expense per month x 9

= 440 x 9

= $3,960

Journal

Dec. 31, 2021 Depreciation Expense 3,960
Accumulated Depreciation - Equipment 3,960

3.

Year-end adjusted balances of Accumulated Depreciation = $3,960

Year-end adjusted balances of Depreciation Expense = $3,960

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