1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 8-2 Calculating and Journalizing Depreciation Expense

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 8-2 Ending Book Value =Annual Depreciation –Beginning Book Value Year 3$1,270.00–$365.00=$905.00 STRAIGHT-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

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 8-2 RECORDING DEPRECIATION ON PLANT ASSET RECORDS 2. Calculate accumulated depreciation. 3. Calculate ending book value. 1.Calculate annual depreciation expense. page 231 123

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 8-2 Depreciation Expense—Office Equipment Jan. 1 Bal.37,434.00 Dec. 31 Adj.11,571.00 Dec. 31 Bal.49,005.00 Accumulated Depreciation—Office Equipment Dec. 31 Adj.11,571.00 JOURNALIZING ANNUAL DEPRECIATION EXPENSE page 232

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 8-2 CALCULATING DEPRECIATION EXPENSE 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

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 8-2 TERMS REVIEW straight-line method of depreciation book value of a plant asset page 234