LESSON 14-5 Planning and Recording Depreciation Adjustments 4/6/2019 LESSON 14-5 Planning and Recording Depreciation Adjustments

CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE page 424 (continued on next slide) 1. Subtract the asset’s estimated salvage value from original cost. 2. Divide the estimated total depreciation expense by the years of estimated useful life. Estimated Total Depreciation Expense = Estimated Salvage Value – Original Cost $1,250.00 – $250.00 = $1,000.00 1 Annual Depreciation Expense = Years of Estimated Useful Life ÷ Estimated Total Depreciation Expense $1,000.00 ÷ 5 = $200.00 2 LESSON 14-5

CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE page 424 (continued from previous slide) 20X3 Accumulated Depreciation = 20X3 Depreciation Expense + 20X2 Accumulated Depreciation $400.00 + $200.00 = $600.00 Ending Book Value = Accumulated Depreciation – Original Cost $1,250.00 – $600.00 = $650.00 LESSON 14-5

ANALYZING AND RECORDING ADJUSTMENTS FOR DEPRECIATION EXPENSE page 425 3 2 1 1. Write the debit amounts. 2. Write the credit amounts. 3. Label the adjustments. LESSON 14-5

TERMS REVIEW current assets plant assets depreciation expense page 426 current assets plant assets depreciation expense estimated salvage value straight-line method of depreciation accumulated depreciation book value of a plant asset LESSON 14-5