Part IClaudia is learning about depreciation and she is getting alittle frustrated with the...Part...

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Accounting

Part I
Claudia is learning about depreciation and she is getting alittle frustrated with the idea of accumulated depreciation. "Whycan’t you just debit depreciation expense and credit equipment?"She complains. "It would be so much easier that way!"
(1) What type of account is accumulated depreciation andwhy does it get used in the depreciation of fixed assets instead ofdoing it Claudia's way?
(2) Does accumulated depreciation have a debit balanceor a credit balance?
Part II
Benny, an inexperienced accountant at Ace Plus, is about to postthe monthly depreciation entries for the company's fixed assets.The depreciation amounts have already been calculated on aspreadsheet by the owner, who is not very knowledgeable inaccounting. Benny's instructions are to post the followingdepreciation amounts for the month:
Building - $1,100
Land - 500
Equipment - 800
What will Benny's journal entries look like if they aredone correctly? Can each item "share" an accumulated depreciationaccount or should each type of asset have its own?

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3.8 Ratings (428 Votes)

hi studentsPlease see below answerPart I1 What type of account is accumulated depreciation andwhy does it get used in the depreciation of fixed assets instead ofdoing it Claudias wayAns Accumulated depreciation is the totaldepreciation for a fixed asset that has been charged to expensesince that asset was acquired and made available for use Theaccumulated depreciation account is an asset account with a creditbalance See Answer

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In: AccountingPart IClaudia is learning about depreciation and she is getting alittle frustrated with the...Part IClaudia is learning about depreciation and she is getting alittle frustrated with the idea of accumulated depreciation. "Whycan’t you just debit depreciation expense and credit equipment?"She complains. "It would be so much easier that way!"(1) What type of account is accumulated depreciation andwhy does it get used in the depreciation of fixed assets instead ofdoing it Claudia's way?(2) Does accumulated depreciation have a debit balanceor a credit balance?Part IIBenny, an inexperienced accountant at Ace Plus, is about to postthe monthly depreciation entries for the company's fixed assets.The depreciation amounts have already been calculated on aspreadsheet by the owner, who is not very knowledgeable inaccounting. Benny's instructions are to post the followingdepreciation amounts for the month:Building - $1,100Land - 500Equipment - 800What will Benny's journal entries look like if they aredone correctly? Can each item "share" an accumulated depreciationaccount or should each type of asset have its own?