Rick Company uses straight-line depreciation for its property,plant,and equipment which-stated at cost-consisted of the following: 2015 2014 Land $ 25 , 000 $ 25 , 000 Buildings 195 , 000 195 , 000 Machinery and equipment 795 , 000 750 , 000 1 , 015 , 000 970 , 000 - Accumulated depreciation ( 420 , 000 ) ‾ ( 400 , 000 ) ‾ Net book value 5595 , 000 $ 570 , 000 \begin{array}{lcc} & \mathbf{2 0 1 5} & \mathbf{2 0 1 4} \ ext { Land } & \$ 25,000 & \$ 25,000 \ ext { Buildings } & 195,000 & 195,000 \ ext { Machinery and equipment } & 795,000 & 750,000 \ & 1,015,000 & 970,000 \ ext { - Accumulated depreciation } & \underline{(420,000)} & \underline{(400,000)} \ ext { Net book value } & 5595,000 & \$ 570,000\end{array} Land Buildings Machinery and equipment - Accumulated depreciation Net book value 2015 $25 , 000 195 , 000 795 , 000 1 , 015 , 000 ( 420 , 000 ) 5595 , 000 2014 $25 , 000 195 , 000 750 , 000 970 , 000 ( 400 , 000 ) $570 , 000 Rick's depreciation expense for 2015 and 2014 was $115,000 and $110,000 respectively.Required:What amount was debited to accumulated depreciation during 2015 because of property,plant,and equipment retirements?

Question

Rick Company uses straight-line depreciation for its property,plant,and equipment which-stated at cost-consisted of the following: 2015 2014  Land  $ 25 , 000 $ 25 , 000  Buildings  195 , 000 195 , 000  Machinery and equipment  795 , 000 750 , 000 1 , 015 , 000 970 , 000  - Accumulated depreciation  ( 420 , 000 ) ‾ ( 400 , 000 ) ‾  Net book value  5595 , 000 $ 570 , 000 \begin{array}{lcc}  &  \mathbf{2 0 1 5}  &  \mathbf{2 0 1 4} \	ext { Land }  &  \$ 25,000  &  \$ 25,000 \	ext { Buildings }  &  195,000  &  195,000 \	ext { Machinery and equipment }  &  795,000  &  750,000 \ &  1,015,000  &  970,000 \	ext { - Accumulated depreciation }  &  \underline{(420,000)}  &  \underline{(400,000)} \ 	ext { Net book value }  & 5595,000  &  \$ 570,000\end{array}  Land   Buildings   Machinery and equipment   - Accumulated depreciation   Net book value  ​ 2015 $25 , 000 195 , 000 795 , 000 1 , 015 , 000 ( 420 , 000 ) ​ 5595 , 000 ​ 2014 $25 , 000 195 , 000 750 , 000 970 , 000 ( 400 , 000 ) ​ $570 , 000 ​ Rick's depreciation expense for 2015 and 2014 was $115,000 and $110,000 respectively.Required:What amount was debited to accumulated depreciation during 2015 because of property,plant,and equipment retirements?

Tiphany santander · Accepted Answer

Final Answer :

To determine the amount debited in 2015,reconstruct the accumulated depreciation T-account:

$400,000 + $115,000 - X = $420,000
X = $95,000
Feedback:Rick Company must have debited accumulated depreciation $95,000 during 2015 because of property,plant,and equipment retirements.

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