CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

LESSON 8-2LESSON 8-2

Calculating and Journalizing Depreciation Expense

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LESSON 8-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

Ending Book Value

=Annual Depreciation

–Beginning Book Value

Year 3 $1,270.00 – $365.00 = $905.00

STRAIGHT-LINE DEPRECIATIONSTRAIGHT-LINE DEPRECIATION page 230

Original Cost $2,000.00– Estimated Salvage Value – 175.00= Estimated Total Depreciation Expense $1,825.00 Years of Estimated Useful Life 5= Annual Depreciation Expense $ 365.00

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LESSON 8-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

RECORDING DEPRECIATION ON RECORDING DEPRECIATION ON PLANT ASSET RECORDSPLANT ASSET RECORDS

2. Calculate accumulated depreciation.3. Calculate ending book value.

1. Calculate annual depreciation expense.

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11 22 33

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LESSON 8-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

Depreciation Expense—Office Equipment

Jan. 1 Bal. 37,434.00Dec. 31 Adj. 11,571.00Dec. 31 Bal. 49,005.00

Accumulated Depreciation—Office Equipment

Dec. 31 Adj. 11,571.00

JOURNALIZING ANNUAL JOURNALIZING ANNUAL DEPRECIATION EXPENSEDEPRECIATION EXPENSE page 232

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LESSON 8-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

CALCULATING DEPRECIATION CALCULATING DEPRECIATION EXPENSE FOR PART OF A YEAREXPENSE FOR PART OF A YEAR page 232

Annual Depreciation Expense $ 120.00

Months in a Year 12

Monthly Depreciation Expense $ 10.00

× Number of Months Asset Is Used × 5

Partial Year’s Depreciation Expense $ 50.00

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LESSON 8-2CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning

TERMS REVIEWTERMS REVIEW

straight-line method of depreciation book value of a plant asset

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