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Accumulated Depreciation: The company has only one fixed plant asset (equipment) that it purchased at the start of this year. That asset had cost $48,000, had an estimated life of seven years, and is expected to be valued at $8,800 at the end of the seven years. The company uses straight line depreciation method to calculate its depreciation.

Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2

Sagot :

Parrain

Based on the depreciation of the equipment, the current balance would equal $0 and but it should equal $5,600.

The adjusting entry would be:
Date                        Account title                                     Debit          Credit

December 31          Depreciation expense                   $5,600

                                Accumulated depreciation                             $5,600

How is depreciation recorded?

The current account balance would be $0 because depreciation has not yet been adjusted for.

The depreciation amount would be:

= (48,000 - 8,800) / 7

= $5,600

This amount should be credited to the Accumulated depreciation account, but debited to the Depreciation expense account as expenses usually are.

Find out more on accumulated depreciation at https://brainly.com/question/1287985.

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