question archive Question: I would like to be clarified on this adjustment particularly on depreciation
Question: I would like to be clarified on this adjustment particularly on depreciation
Subject:AccountingPrice:2.86 Bought3
Question: I would like to be clarified on this adjustment particularly on depreciation. My question would be, how did you come up with 36, 500 depreciation on building and 109, 000 on equipment. I got the formula of (73 000 x 6)/12 and (218 000 x 6)/12 to get the amounts of 36, 500 and 109, 000. But where did you get the value of 6? i mean, why multiplied to 6 months?
Thanks in advance.
Information:
The following contains the cost and annual depreciation for buildings and equipment, all of which were purchased before the current year:
Account Cost Annual Depreciation
Buildings 1, 850, 000 73, 000
Equipment 2, 180, 000 218, 000
Answer for adjusting entry:
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Hi, the data you've send is incomplete but I've searched the problem. If it is still the same problem as I've searched, the answer in your question is because of the date the transaction occur. The 73,000 and 218,000 the depreciation for the whole year . Therefore dividing it in 12 months and multiplying it 6 months to get the depreciation as of June 30.
This is waht stated in the problem I've searched
"On June 30, 2015, the end of fiscal year, the following information is available to Noel Hungria's accountants for making adjusting entries:"
In answering accounting questions. Please always take note the date.
