Part 1 :
Store equipment is purchased on January 1, 2002 at a cost of $14,000 and $1,000 was spent on its installation. The depreciation is written-off at 10% on the original cost every year. The books are closed on December 31, every year.
Instructions:
Prepare a Depreciation Expense-Stores Equipment Account and an Accumulated Depreciation-Stores Equipment Account.
Part 2 :
A company acquired office equipment on January 1, 2001 at a cost of $40,000 and spent $1,000 on its installation. The company writes-off depreciation at 10% using the reducing balance method. The accounting books are closed on December 31 each year.
Instructions:
Show the depreciation account for three years.