I am preparing an adjusted trial balance and I have almost gotten my debits to equal my credits. I need to figure out how much to debit the equipment and how much to credit the accumulated depreciaton. To give you an idea of the gap between the two, my debits thus far are 57,900 and my credits are 117, 900. The unadjusted bits that need to be adjusted are: equipment 75,000, accumulated depreciation 10,000, and depreciation expense 0. The adusting entry indicates that depreciaton expense gets debited 5,000 and accumulated depreciaton gets credited 5,000.

Question

I am preparing an adjusted trial balance and I have almost gotten my debits to equal my credits.  I need to figure out how much to debit the equipment and how much to credit the accumulated depreciaton.  To give you an idea of the gap between the two, my debits thus far are 57,900 and my credits are 117, 900.  The unadjusted bits that need to be adjusted are:  equipment 75,000, accumulated depreciation 10,000, and depreciation expense 0.  The adusting entry indicates that depreciaton expense gets debited 5,000 and accumulated depreciaton gets credited 5,000.

Explain Bot · Answer

To figure out how much to debit the equipment and how much to credit the accumulated depreciation, we can start by analyzing the existing balances and the adjusting entry. Currently, your debits total $57,900 and your credits total $117,900. This means there is a difference of $60,000 ($117,900 - $57,900), which needs to be accounted for. The adjusting entry indicates that depreciation expense needs to be debited for $5,000 and accumulated depreciation needs to be credited for $5,000. This means that $10,000 ($5,000 debited + $5,000 credited) needs to be allocated between the equipment and accumulated depreciation. Let's break it down step by step: 1. Calculate the new balance for accumulated depreciation: - Starting accumulated depreciation balance: $10,000 - Adjusting entry to credit accumulated depreciation: $5,000 - New accumulated depreciation balance: $15,000 ($10,000 + $5,000) 2. Calculate the adjusted balance for equipment: - Starting equipment balance: $75,000 - Adjusting entry for depreciation expense: $5,000 - Difference to be allocated between equipment and accumulated depreciation: $10,000 ($15,000 - $5,000) - New adjusted balance for equipment: $85,000 ($75,000 + $10,000) Therefore, you would debit the equipment for $85,000 and credit accumulated depreciation for $15,000 to make your debits equal to your credits and reflect the adjustments properly.