Question

Willow Creek purchased and installed carpet in its new general offices on March 30 for a total cost of $10,440. The carpet is estimated to have a 15-year useful life and no residual value. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method. Do not round intermediate calculations.

Answer 1

Recording the December 31 adjusting entry, the partial-year depreciation expense for the carpet will be $522.

Step-by-step explanation:

To record the December 31 adjusting entry for partial-year depreciation expense for the carpet using the straight-line method, you need to calculate the annual depreciation expense first.

The formula to calculate straight-line depreciation is: (Cost - Residual Value) / Useful Life.

In this case, since the carpet has a 15-year useful life and no residual value, the annual depreciation expense would be $10,440 / 15 = $696.

Next, to calculate the partial-year depreciation, divide the annual depreciation expense by 12 (number of months in a year) and multiply it by the number of months the carpet was used (9 months).

So, the partial-year depreciation expense would be ($696 / 12) * 9 = $522.