Flint Corporation purchased equipment costing $136,800 on January 1, 2021. At that time the useful life of the equipment was estimated to be 12 years and the residual value was estimated to be $7,620. Depreciation up to December 31, 2022 has been recorded using the straight-line method and the company operates on a calendar year basis. On January 1, 2023, the estimated useful life was revised to a total of 10 years and the residual value was revised to $8,422. Prepare the journal entry to record the depreciation expense for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.) Account Titles Depreciation Expense Accumulated Depreciation - Equipment Debit 68400 Credit 68400
Flint Corporation purchased equipment costing $136,800 on January 1, 2021. At that time the useful life of the equipment was estimated to be 12 years and the residual value was estimated to be $7,620. Depreciation up to December 31, 2022 has been recorded using the straight-line method and the company operates on a calendar year basis. On January 1, 2023, the estimated useful life was revised to a total of 10 years and the residual value was revised to $8,422. Prepare the journal entry to record the depreciation expense for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.) Account Titles Depreciation Expense Accumulated Depreciation - Equipment Debit 68400 Credit 68400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Flint Corporation purchased equipment costing $136,800 on January 1, 2021. At that time the useful life of the equipment was
estimated to be 12 years and the residual value was estimated to be $7,620. Depreciation up to December 31, 2022 has been
recorded using the straight-line method and the company operates on a calendar year basis. On January 1, 2023, the estimated useful
life was revised to a total of 10 years and the residual value was revised to $8,422.
Prepare the journal entry to record the depreciation expense for 2023. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.)
Account Titles
Depreciation Expense
Accumulated Depreciation - Equipment
Debit
68400
Credit
68400
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