- Assignment 3-Ch 3-Con...
mment 3- Ch 3
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Mean Beans, a local coffee shop, has the following assets on January 1, 2023. Mean Beans prepares annual financial statements and
has a December 31, 2023 year-end. The company's depreciation policy is to use the straight-line method to depreciate its assets.
a. On January 1, 2023, purchase equipment costing $23,400 with an estimated life of five years. Mean Beans will scrap the equipment
after five years for $0.
a. Annual depreciation expense on equipment
b. Annual depreciation expense on furniture
c. Annual depreciation expense on car
b. On July 1, 2023, purchase furniture (tables and chairs) costing $17,900 with an estimated life of ten years. Mean Beans estimates
that it can sell the furniture for $2,500 after ten years.
Required:
1-a. For each transaction, calculate the current year's annual depreciation expense.
$ 4,680
$
770
2,575
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c. On January 1, 2021, Mean Beans had purchased a car costing $25,750 with an estimated life of eight years. Mean Beans estimates
that it can sell the car for $5,150 after eight years.
$
Help
1-b. For each transaction, record the adjusting entry on December 31, 2023.
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