1. LESSON 14-5 Planning and Recording Depreciation Adjustments
6/2/2018
LESSON 14-5
Planning and Recording Depreciation Adjustments

2. CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE
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(continued on next slide)
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.
Estimated Total Depreciation Expense =
Estimated Salvage Value –
Original Cost
$1,250.00 –
$250.00 =
$1,000.00 1
Annual Depreciation Expense =
Years of Estimated Useful Life ÷
Estimated Total Depreciation Expense
$1,000.00 ÷ 5 =
$200.00 2
LESSON 14-5

3. CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE
page 424
(continued from previous slide)
20X3 Accumulated Depreciation =
20X3 Depreciation Expense +
20X2 Accumulated Depreciation
$400.00 +
$200.00 =
$600.00
Ending Book Value =
Accumulated Depreciation –
Original Cost
$1,250.00 –
$600.00 =
$650.00
LESSON 14-5

4. ANALYZING AND RECORDING ADJUSTMENTS FOR DEPRECIATION EXPENSE
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1. Write the debit amounts.
2. Write the credit amounts.
3. Label the adjustments.
LESSON 14-5

5. TERMS REVIEW current assets plant assets depreciation expense
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current assets
plant assets
depreciation expense
estimated salvage value
straight-line method of depreciation
accumulated depreciation
book value of a plant asset
LESSON 14-5