Respuesta :
Working notes:
Property and Equipment
Opening balance $7,740,000
Accumulated Dep $319,500
Bank $400,000 Bank $58,500
P and L Account $18,000
the closing balance of $7,780,000
$8,158,000 $8,158,000
Accumulated Depreciation- Property and Equipment
Equipment (on building sold) $319,500
Opening balance $455,000
P and L Account $440,500
Closing balance $576,000
$895,500 $895,500
Accumulated depreciation is a contra-asset account that is used to record the depreciation expense of a fixed asset over its useful life. This account is used to reduce the value of an asset on the balance sheet and is reported as a negative number. Accumulated depreciation is an accounting tool used to record the declining value of a fixed asset over time. The use of this account helps a company to recognize the decrease in an asset’s value due to wear and tear age, or obsolescence.
The amount of accumulated depreciation is the total amount of depreciation expense that has been charged to the asset since the date of purchase. The accumulated depreciation will increase over time until the asset has been fully depreciated. Since accumulated depreciation is a contra-asset account, it is reported as a deduction from the asset’s cost in the balance sheet. This account is also used to calculate the book value of an asset, which is the value of the asset on the balance sheet after the accumulated depreciation is deducted from the cost.
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