Grove corp. purchased equipment at a cost of $260,000 in january, 2010. as of january 1, 2014, depreciation of $88,000 had been recorded on this asset. depreciation expense for 2014 is $22,000. after the adjustments are recorded and posted at december 31, 2014, what are the balances for the depreciation expense and accumulated depreciation?

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Business

Quincy Mcdaniel

21 December, 06:17

Grove corp. purchased equipment at a cost of $260,000 in january, 2010. as of january 1, 2014, depreciation of $88,000 had been recorded on this asset. depreciation expense for 2014 is $22,000. after the adjustments are recorded and posted at december 31, 2014, what are the balances for the depreciation expense and accumulated depreciation?

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Slade · Answer 1

Before getting the balances of the two accounts, you should know first is the difference between the two accounts:

Depreciation expense is an account title used to record depreciation and it is recorded each accounting period. This account is closed in the income summary account at the end of the accounting period.

Accumulated depreciation is an account title used to determine a ppe’s carrying value. This account is not closed at the ending of the accounting period since this is viewed as a permanent account.

The value of the two is computed by:

Accumulated Depreciation:

Accumulated Depreciation at January 1, 2014: 88,000

Depreciation Expense for 2014: 22,000

= $110,000

Depreciation Expense would be the depreciation expense for 2014 which is $22,000