Prepare entry to record acquisition of the computer system

Reference no: EM131421403

Stockton Corporation purchased a new computer system on January 1, 2011, for $300,000 cash. The company also incurred $25,000 in installation costs and $10,000 to train its employees on the new system. The computer system has an estimated useful life of five years and an estimated salvage value of $70,000.

a. Prepare the entry to record the acquisition of the computer system.

b. Calculate the depreciation expense recognized each year over the life of the system for each of the following assumptions:

(1) Stockton uses straight-line depreciation.

(2) Stockton uses double-declining-balance depreciation.

c. Provide the journal entry recorded by Stockton at the end of 2011 under the doubledeclining-balance method.

Reference no: EM131421403

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