Part 1 :

Store equipment is purchased on January 1, 2002 at a cost of $14,000 and $1,000 was spent on its installation. The depreciation is written-off at 10% on the original cost every year. The books are closed on December 31, every year.

Instructions:
Prepare a Depreciation Expense-Stores Equipment Account and an Accumulated Depreciation-Stores Equipment Account.

Part 2 :
A company acquired office equipment on January 1, 2001 at a cost of $40,000 and spent $1,000 on its installation. The company writes-off depreciation at 10% using the reducing balance method. The accounting books are closed on December 31 each year.

Instructions:
Show the depreciation account for three years.

Part 1:

Depreciation Expense - Store Equipment Account:

Date Description Debit Credit
--------------------------------------------
Jan 1, 2002 Store Equipment $14,000
Jan 1, 2002 Installation Expense $1,000
Dec 31, 2002 Depreciation Expense $1,500
Dec 31, 2003 Depreciation Expense $1,350
Dec 31, 2004 Depreciation Expense $1,215
...

Accumulated Depreciation - Store Equipment Account:

Date Description Debit Credit
--------------------------------------------
Jan 1, 2002 Store Equipment $15,000
Dec 31, 2002 Depreciation Expense $1,500
Dec 31, 2003 Depreciation Expense $1,350
Dec 31, 2004 Depreciation Expense $1,215
...

Part 2:

Depreciation Expense - Office Equipment Account:

Year Description Debit Credit
--------------------------------------------
Jan 1, 2001 Office Equipment $40,000
Jan 1, 2001 Installation Expense $1,000
Dec 31, 2001 Depreciation Expense[(40,000-1,000) * 10%] $3,900
Dec 31, 2002 Depreciation Expense[([40,000-1,000-3,900] * 10%)] $3,510
Dec 31, 2003 Depreciation Expense[([36,100-1,000-3,510] * 10%)] $3,159
...

Note: For the reducing balance method, the depreciation expense is the previous year's net book value multiplied by the depreciation rate (10% in this case).

I hope these accounts depreciate your boredom!

Part 1:

To prepare the Depreciation Expense-Stores Equipment Account and the Accumulated Depreciation-Stores Equipment Account, follow these steps:

1. Determine the annual depreciation expense:
- Original Cost: $14,000
- Installation Cost: $1,000
- Total Cost: $14,000 + $1,000 = $15,000
- Annual Depreciation: 10% of Total Cost = 10% * $15,000 = $1,500

2. Prepare the Depreciation Expense-Stores Equipment Account:

| | | | | |
|----------------|----------|---------|---------|---------|
| Date | Debit | Credit | Balance | Reason |
|----------------|----------|---------|---------|---------|
| Jan 1, 2002 | $1,500 | $0 | $1,500 | Initial |
| Dec 31, 2002 | $1,500 | $0 | $3,000 | Year 1 |
| Dec 31, 2003 | $1,500 | $0 | $4,500 | Year 2 |
| Dec 31, 2004 | $1,500 | $0 | $6,000 | Year 3 |
| ... | ... | ... | ... | ... |

3. Prepare the Accumulated Depreciation-Stores Equipment Account:

| | | | | |
|----------------|----------|---------|---------|---------|
| Date | Debit | Credit | Balance | Reason |
|----------------|----------|---------|---------|---------|
| Jan 1, 2002 | $0 | $0 | $0 | Initial |
| Dec 31, 2002 | $1,500 | $0 | $1,500 | Year 1 |
| Dec 31, 2003 | $1,500 | $0 | $3,000 | Year 2 |
| Dec 31, 2004 | $1,500 | $0 | $4,500 | Year 3 |
| ... | ... | ... | ... | ... |

Part 2:

To show the depreciation account for three years using the reducing balance method, follow these steps:

1. Determine the annual depreciation expense:
- Original Cost: $40,000
- Installation Cost: $1,000
- Total Cost: $40,000 + $1,000 = $41,000
- Annual Depreciation Rate: 10%
- Calculate Depreciation Expense: Depreciation Rate * Book Value

2. Calculate Book Value each year:

| Date | Purchase Cost | Accumulated Depreciation | Book Value |
|---------------|---------------|-------------------------|------------ |
| Jan 1, 2001 | $41,000 | $0 | $41,000 |
| Dec 31, 2001 | $41,000 | $4,100 | $36,900 |
| Dec 31, 2002 | $36,900 | $7,380 | $29,520 |
| Dec 31, 2003 | $29,520 | $10,472 | $19,048 |
| ... | ... | ... | ... |

3. Prepare the Depreciation Account:

| | | | | |
|----------------|----------|---------|---------|---------|
| Date | Debit | Credit | Balance | Reason |
|----------------|----------|---------|---------|---------|
| Jan 1, 2001 | $4,100 | $0 | $4,100 | Initial |
| Dec 31, 2001 | $4,381 | $0 | $8,481 | Year 1 |
| Dec 31, 2002 | $3,618 | $0 | $12,099 | Year 2 |
| Dec 31, 2003 | $2,152 | $0 | $14,251 | Year 3 |
| ... | ... | ... | ... | ... |

Note: The debit and credit amounts in the Depreciation Account are calculated using the reducing balance method. The depreciation expense is debited, and the accumulated depreciation is credited.

Part 1:

To prepare the Depreciation Expense-Stores Equipment Account and Accumulated Depreciation-Stores Equipment Account, you need to follow these steps:

1. Calculate the annual depreciation expense. Since the depreciation is written-off at 10% on the original cost every year, you need to multiply the original cost by 10% (or 0.1). In this case, the original cost is $14,000.

Annual depreciation expense = Original cost * Depreciation rate
= $14,000 * 0.1
= $1,400

2. Prepare the Depreciation Expense-Stores Equipment Account by recording the annual depreciation expense. Assume the books are closed on December 31 each year.

| Depreciation Expense-Stores Equipment Account |
--------------------------------------------------------------------
Date | Description | Amount |
--------------------------------------------------------------------
January 1, 2002 | Purchase of Store Equipment | $14,000 |
--------------------------------------------------------------------
December 31, 2002 | Depreciation Expense (10%) | $1,400 |
--------------------------------------------------------------------
December 31, 2003 | Depreciation Expense (10%) | $1,400 |
--------------------------------------------------------------------
December 31, 2004 | Depreciation Expense (10%) | $1,400 |
--------------------------------------------------------------------

3. Prepare the Accumulated Depreciation-Stores Equipment Account by accumulating the annual depreciation expense.

| Accumulated Depreciation-Stores Equipment |
--------------------------------------------------------------------
Date | Description | Amount |
--------------------------------------------------------------------
January 1, 2002 | Purchase of Store Equipment | $14,000 |
--------------------------------------------------------------------
December 31, 2002 | Accumulated Depreciation (10%) | $1,400 |
--------------------------------------------------------------------
December 31, 2003 | Accumulated Depreciation (10%) | $2,800 |
--------------------------------------------------------------------
December 31, 2004 | Accumulated Depreciation (10%) | $4,200 |
--------------------------------------------------------------------

Part 2:

To show the depreciation account for three years using the reducing balance method, you need to follow these steps:

1. Calculate the annual depreciation expense. Since the company writes-off depreciation at 10% using the reducing balance method, you need to multiply the net book value (NBV) at the beginning of each year by the depreciation rate. The NBV is the cost of the asset minus the accumulated depreciation.

Annual depreciation expense = NBV * Depreciation rate

2. Prepare the Depreciation Expense Account for three years. Assume the books are closed on December 31 each year.

| Depreciation Expense |
----------------------------------------------------
Date | Description |
----------------------------------------------------
January 1, 2001 | Acquisition of Office Equipment |
----------------------------------------------------
December 31, 2001 | Depreciation Expense (10%) |
----------------------------------------------------
December 31, 2002 | Depreciation Expense (10%) |
----------------------------------------------------
December 31, 2003 | Depreciation Expense (10%) |
----------------------------------------------------

Remember to calculate and record the annual depreciation expense using the reducing balance method and consider the net book value at the beginning of each year.