Question

Tweedie Company reported the following in the long-term asset section of its balance sheet. They did not purchase or sell any equipment during the period. Dec. 31, Year 2 Dec. 31, Year 1 Equipment, net of depreciation of $120,000 and 100,000, respectively $167,500 $187,500 Patent, net of amortization of $31,500 and $27,000, respectively 88,000 92,500 The company uses the straight-line method to depreciate and amortize all of its operating assets. How much depreciation expense did Tweedie record in Year 2

Answer 1

Tweedie Company

The total Depreciation Expense that Tweedie recorded in Year 2 is $20,000.

The total Amortization Expense that Tweedie recorded in Year 2 is $4,500.

Step-by-step explanation:

a) Data and Calculations:

Dec. 31, Year 2 Dec. 31, Year 1 Depreciation

Expense

Equipment, net $167,500 $187,500 $20,000

Patent, net 88,000 92,500 4,500

Equipment depreciation $120,000 $ 100,000 $20,000

Patent amortization $31,500 $27,000 4,500

b) Note that the depreciation and amortization expenses can be computed from the net balances or from the depreciation and amortization expenses for the two years respectively.