On January 1, Miami Gold Exchange paid cash of $64,800 for computers that are ex
ID: 2337640 • Letter: O
Question
On January 1, Miami Gold Exchange paid cash of $64,800 for computers that are expected to remain useful for six years. At the end of six years, the value of the computers is expected to be zero Read the requirements Requirement 1. Calculate the amount of depreciation for the month of January using the straight-line depreciation method. Begin by selecting the labels, than enter the amounts and compute the amount of depreciation for the month of January. (Abbreviation used; Acc. Depreciation Accumulated Depreciation. Enter a "O" for any zero balances.) )1 / 12 monthsStraight-line depreciation Requirements 1. Calculate the amount of depreciation for the month of January using the straight-line depreciation method 2. Record the adjusting entry for depreciation on January 31 3. Post the purchase of January 1 and the depreciation on January 31 to T-accounts for the following accounts: Computer Equipment, Accumulated DepreciationComputer Equipment, and Depreciation Expense Computer Equipment. Show their balances at January 31 4. What is the computer equipment's book value at January 31?Explanation / Answer
Answer 1. Straight Line Depreciation = (Cost - Salavage Value) / Life of Assets / 12 Months Straight Line Depreciation = ($64,800 - $0) / 6 Years / 12 Months Straight Line Depreciation = $900 per Month Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 31-Jan Depreciation Expense - Computer Equipment 900.00 Accumulated Depreciation - Computer Equipment 900.00 (To record the depreciation expense) Answer 3. Computer Equipment 1-Jan 64,800.00 End. Bal. 64,800.00 Accumulated Depreciation -Computer Equipment 900.00 31-Jan End. Bal. 900.00 Depreciation Expense -Computer Equipment 31-Jan 900.00 End. Bal. 900.00 Answer 4. Computer Equipment 64,800.00 Accumulated Depreciation -Computer Equipment (900.00) Book Value as on Jan-31 63,900.00