Answer:
a. Debit Depreciation expense $6,400
Credit Accumulated depreciation $6,400
b. $33,600
Explanation:
Depreciation is the systematic allocation of cost to an asset. It is given as
Depreciation = (Cost - salvage value)/estimated life
When accumulated over time, it is known as accumulated depreciation which is deducted from the cost to get the carrying amount of the asset.
Depreciation
= (100000 - 10000)/6
=$15,000
Between 2015 and start of 2019 is 4 years hence
accumulated depreciation at start of 2019
= $15,000 × 4
= $60,000
Net book value = $100,000 - $60,000
= $40,000
If the asset life is to be extended by 3 years, the remaining useful life changes from 2 to 5 years.
New depreciation rate
= (40,000 - 8000)/5
= $6,400
To record this for 2019,
Debit Depreciation expense $6,400
Credit Accumulated depreciation $6,400
The book value of the equipment at the end of 2019
= $40,000 - $6,400
= $33,600
Based on the information given journal entry to record depreciation expense on the equipment and the book value are:
Moser, Inc., Journal entries
a. Dec-31
Debit Depreciation expenses-Equipment $6,400
Credit Accumulated Depreciation-Equipment $6,400
(To record depreciation expense )
Depreciation =($100,000 - $10,000) / 6 years
Depreciation=$15,000
Carrying value of equipment =$100,000 - ($15,000×4)
Carrying value of equipment =$40,000
Remaining revised useful life =9 years - 4 years
Remaining revised useful life=5 years
Revised Depreciation on equipment =($40,000 - $8,000) / 5 years
Revised Depreciation on equipment =$6,400
b. Book value of equipment
Book value =$40,000 - $6,400
Book value=$33,600
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