# CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-5 Planning and Recording Depreciation Adjustments.

## Presentation on theme: "CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-5 Planning and Recording Depreciation Adjustments."— Presentation transcript:

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-5 Planning and Recording Depreciation Adjustments

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 14-5 CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE page 424 Estimated Total Depreciation Expense = Estimated Salvage Value – Original Cost \$1,000.00=\$250.00–\$1,250.00 Annual Depreciation Expense = Years of Estimated Useful Life ÷ Estimated Total Depreciation Expense \$200.00=5÷\$1,000.00 1.Subtract the asset’s estimated salvage value from original cost. 2.Divide the estimated total depreciation expense by the years of estimated useful life. 1 2 (continued on next slide)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 14-5 CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE page 424 20X3 Accumulated Depreciation = 20X3 Depreciation Expense + 20X2 Accumulated Depreciation \$600.00=\$200.00+\$400.00 Ending Book Value = Accumulated Depreciation –Original Cost \$650.00=\$600.00–\$1,250.00 (continued from previous slide)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 14-5 ANALYZING AND RECORDING ADJUSTMENTS FOR DEPRECIATION EXPENSE page 425 1 2 3 3 1.Write the debit amounts. 2.Write the credit amounts. 3.Label the adjustments.

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 14-5 TERMS REVIEW current assets plant assets depreciation expense estimated salvage value straight-line method of depreciation accumulated depreciation book value of a plant asset page 426