For each separate case, record an adjusting entry (if necessary). Barga Company purchases $32,000 of equipment on January 1. The equipment is expected to last five years and be worth $4,400 at the end of that time. Welch Company purchases $11,200 of land on January 1. The land is expected to last forever.

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Business

Adolfo Mooney

31 July, 06:07

For each separate case, record an adjusting entry (if necessary). Barga Company purchases $32,000 of equipment on January 1. The equipment is expected to last five years and be worth $4,400 at the end of that time. Welch Company purchases $11,200 of land on January 1. The land is expected to last forever.

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Chaim Garrett · Answer 1

Equipment:

Dr. Cr.

Depreciation Expense $5,520

Accumulated Depreciation $5,520

Land:

Land never depreciates, so there is no adjusting entry for the Land purchased on year end.

Explanation:

Year end is not given in the data so, it is assumed the December 31 is the end of the year

Equipment

Depreciation for the year = (Purchase price - Residual value) / useful life

Depreciation for the year = ($32,000 - $4,400) / 5 years

Depreciation for the year = $5,520