Prepare the journal entries to record depreciation expense

Assignment Help Accounting Basics
Reference no: EM132601505

Question - Holtzman Company is in the process of preparing its financial statements for 2019. Assume that no entries for depreciation have been recorded in 2019. The following information related to depreciation of fixed assets is provided to you.

1. Holtzman purchased equipment on January 2, 2016, for $85,000. At that time, the equipment had an estimated useful life of 10 years with a $5,000 residual value. The equipment is depreciated on a straight-line basis. On January 2, 2019, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,000 residual value.

2. During 2019, Holtzman changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a residual value of $30,000. The following computations present depreciation on both bases for 2017 and 2018.

2018 2017

Straight-line $27,000 $27,000

Declining-balance 48,000 60,000

3. Holtzman purchased a machine on July 1, 2017, at a cost of $120,000. The machine has a residual value of $16,000 and a useful life of 8 years. Holtzman's bookkeeper recorded straight-line depreciation in 2017 and 2018 but failed to consider the residual value.

Instructions -

a. Prepare the journal entries to record depreciation expense for 2019 and correct any errors made to date related to the information provided.

b. Show comparative net income for 2018 and 2019. Income before depreciation expense was $300,000 in 2019, and was $310,000 in 2018. (Ignore taxes.)

Reference no: EM132601505

Questions Cloud

How many units would the company plan to produce in July : Houseman, Inc. anticipates sales of 45,000 units, 43,000 units, and 46,000 units. On the basis of this information, how many units would the company plan
Explain any four bond terminologies : Explain any FOUR bond terminologies
Give an example of a company in kenya : Give an example of a company in Kenya that has issued a bond recently, and explain its use and degree of success
Issue for the target population : Outline a proposal for health education that can be used in a family-centered health promotion to address the issue for the target population.
Prepare the journal entries to record depreciation expense : Prepare the journal entries to record depreciation expense for 2019 and correct any errors made to date related to the information provided
Explain any two bond strategies : Explain any two bond strategies
Summarize the type of manufacturing company : Summarize the type of manufacturing company you plan to start up and determine how you will design the value chain for your manufacturing company.
What Net Income or Loss is reported : Assume a corporate tax rate of 30% for 2016 and 2017, and 40% for 2018. What Net Income/(Loss) is reported in 2017
What are the top three markets by share : a. What are the top three markets by share? b. What happened to passenger yields?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd