The Question is 1. On July 1st, Harding Construction purchases a bulldozer for $330,000. The equipment has a year life with a residual value of $15,000. Harding uses striaght line depreciation. (a) Calculatre the depreciation expense and provide the journal entry for the first year ending December 31st.(b) Calculate the third year and provide the journal entry for the third year ending Dec31st(c) Calculate the last year's depreciation expense and provide the journalentry for the last year.The answer i got was.(a) 12/31/01Depreciation Expense $35,000 Accumulated Deprecation $35,000(b) 12/31/03Depreciation Expense $35,000 Accumulated Deprecation $105,000(c) 12/31/10Depreciation Expense $35,000 Accumulated Depreciation 315,000Am i correct? Please and thank you
that is not actually wrong
Debits should always equal the credits. Your answer for A is correct. Straight line depreciation uses the same amount of depreciation each year, therefore the journal entry for each year will be the same amount assuming the estimates are not changed at any point. I think you got confused with the balance in the accumulated depreciation account and the number you should use for the journal entry. B should be: Depreciation Expense $35,000 Acc. Depreciation $35,000 C should be the same thing. After 9 years of depreciating the equipment at $35k per year the value should equal the residual of $15k. Hope this helps.
The question says that the bulldozer has a year life (which seems like a pretty crappy bulldozer), but then asks for the depreciation in the third year, etc. Is it supposed to be a 10-year life?
