At the end of its first year, the trial balance of Riko Company shows Equipment $20,590 and zero balances in Accumulated Depreciation–Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,333. Prepare the adjusting entry for depreciation at December 31, and by posting the adjustments to T accounts indicate the balance sheet presentation of the equipment at December 31.

Question

At the end of its first year, the trial balance of Riko Company shows Equipment $20,590 and zero balances in Accumulated Depreciation–Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,333. Prepare the adjusting entry for depreciation at December 31, and by posting the adjustments to T accounts indicate the balance sheet presentation of the equipment at December 31.

plzz help

Answer 1

Dep. Expense--Equipment 3,333

Accumulated Dep.--Equip 3,333

Answer 2

ty alot !!now i get it i thought u take 3333/12.

Answer 3

To prepare the adjusting entry for depreciation at December 31 and understand the balance sheet presentation of the equipment at that time, we need to follow a few steps:

Step 1: Calculate the amount of depreciation for the year
In this case, the depreciation for the year is estimated to be $3,333.

Step 2: Determine the balance in the Accumulated Depreciation – Equipment account
Since the trial balance shows zero balances in Accumulated Depreciation – Equipment and Depreciation Expense, we can assume that there is no prior depreciation recorded.

Step 3: Prepare the adjusting entry
The adjusting entry will reflect the depreciation expense for the year, which will increase the Accumulated Depreciation – Equipment account and decrease the Equipment account. Here's the adjusting entry:

Depreciation Expense $3,333
Accumulated Depreciation – Equipment $3,333

This entry increases the Depreciation Expense account (an expense account) and increases the Accumulated Depreciation – Equipment account (a contra asset account).

Step 4: Post the adjusting entry to the T accounts
To understand the balance sheet presentation of the equipment at December 31, we need to post the adjusting entry to the T accounts for Equipment and Accumulated Depreciation – Equipment.

Here's how the T accounts will look like after posting the adjusting entry:

Equipment (before adjustment): $20,590
Depreciation Expense: $3,333
Accumulated Depreciation – Equipment: $3,333
Equipment (after adjustment): $20,590 - $3,333 = $17,257
Accumulated Depreciation – Equipment: $3,333

The Equipment account now shows a reduced value of $17,257 after taking into account the depreciation expense. The Accumulated Depreciation – Equipment account now has a balance of $3,333, reflecting the accumulated depreciation for the equipment.

This is how the balance sheet will present the equipment at December 31:

Equipment: $17,257
Less: Accumulated Depreciation: $3,333
Net Equipment: $13,924

The equipment will be presented on the balance sheet with a net value of $13,924, calculated by subtracting the accumulated depreciation from the original cost of the equipment.