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31 May, 11:13

The adjusted trial balance for Rowdy Profits Corporation reports that its equipment had cost $250,000. For the current year, the company has recorded $30,000 of depreciation, which brings the total depreciation to date to $150,000.

Balance Sheet Income Statement

Assets Revenues

Liabilities Expenses

Stockholders

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Answers (2)
  1. 31 May, 12:33
    0
    The equipment that had a cost of 250.000 is consider to be an asset, so the assets would have an increase of $ 250,000. This account appears on the balance sheet.

    The company has recorded $ 30,000 of depreciation, which means that 30,000 is considered as en expense on the income statement.

    The accumulate depreciated of 150,000, is an asset account with a credit balance, which means that the account that appears on the Balance Sheet is Accumulated Depreciation of $ - 150,000

    Explanation:

    In conclusion:

    Balance Sheet

    Assets Income Statement

    Equipment $ 250,000 Expenses

    Accumulated Depreciation $ - 150,000 Depreciated Expense $ 30,000

    There are no transaction regarding revenues, liabiliaties, stockholders, to record.
  2. 31 May, 13:27
    0
    From indications, it is clear that the requirement is showing the impact of the transactions in the balance sheet and income statement under relevant line items.

    Balance sheet extract:

    Equipment at cost $250000

    accumulated depreciation ($150000)

    Net book value $100000

    Income statement extract:

    Depreciation expense ($30000)

    Explanation:

    The balance sheet would show equipment net book value of $100000 (Cost less accumulated depreciation)

    The income statement would show depreciation expense of $30000

    There is no impact on liabilities as the no obligation to pay another party a sum of money was present in the scenario.

    Also, there is no direct impact on stockholders, the only indirect impact is that the retained earnings would have been reduced by depreciation.
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