Henry-K Company purchased a computer system for €21,600 on January 1, 2020. The company expects to use the computer system for 3 years. It has no residual value. Required: If financial statements are prepared monthly, prepare the adjusting entry to be made by Henry-K Company on January 31, 2020. Date Accounts titles and explanation Debit Credit
Henry-K Company purchased a computer system for €21,600 on January 1, 2020. The company expects to use the computer system for 3 years. It has no residual value. Required: If financial statements are prepared monthly, prepare the adjusting entry to be made by Henry-K Company on January 31, 2020. Date Accounts titles and explanation Debit Credit
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 24E
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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