Question

On June 30, 2016, Colora Printers purchased a printer for $59,000. It expects the printer to last for four years and have a residual value of $8,000. Compute the depreciation expense on the printer for the year ended December 31, 2016, using the straight-line method. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Answer 1

depreciation expense 6,375 debit

accumulate depreciation printer 6,375 credit

Step-by-step explanation:

To calculate the depreciation we will follow this steps:

1.- Calculate the amount subject to depreciation

purchase 59,000

salvage (8,000)

depreciable amount 51,000

2.- We calculate the striaght-line depreciation

depreciable amount / useful life

51,000/4 = 12,750

Now this amount is for a complete year. The printer enter the accounting on June 30th so at December 31th we have half-year

12,750 --> complete year

12,750/2 --> half year = 6,375

3.- we do the entry:

we recognize the depreication expense

and increase the accumulated depreciation on the printer