The following accounts were taken from the trial balance of Cole Company as of December 31, 2015: sales 70,000$ Inventory 23,000 Interest Revenue 3,000$ Advertising Expense 1,500 Equipment 52,000$ Selling Expense 7,500 Accumulated Depreciation - Equipment 9,600 Interest Expense 2,000 Given the information below, make the necessary adjusting entries. The equipment has an estimated useful life of 10 years and a salvage value of $4,000. Depreciation is calculated using
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
The following accounts were taken from the
sales 70,000$ Inventory 23,000
Interest Revenue 3,000$ Advertising Expense 1,500
Equipment 52,000$ Selling Expense 7,500
Given the information below, make the necessary
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The equipment has an estimated useful life of 10 years and a salvage value of $4,000. Depreciation is calculated using the straight-line method.
2.Of selling expense, $1,500 has been paid in advance.
3.Interest of $800 has accrued on notes receivable.
4.Of advertising expense, $440 was incorrectly debited to Selling Expense.
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