Reference no: EM132972899

Question - For each separate case below, follow the three-step process for adjusting the Accumulated Depreciation account at December 31.

Step 1: Determine what the current account balance equals.

Step 2: Determine what the current account balance should equal.

Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.

Assume no other adjusting entries are made during the year.

a. The Krug Company's Accumulated Depreciation account has a $15,500 balance to start the year. A review of depreciation schedules reveals that $17,000 of depreciation expense must be recorded for the year.

b. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $48,000, had an estimated life of 5 years, and is expected to have zero value at the end of the 5 years.

c. The company has only one fixed asset (equipment) that it purchased at the start of this year. That asset had cost $40,000, had an estimated life of 7 years, and is expected to be valued at $6,400 at the end of the 7 years.