Question

How to obtain the accumulated depreciate - Training equipment = $34,100? How to balance the adjus...

How to obtain the accumulated depreciate - Training equipment = $34,100?

How to balance the adjusted trail balance?

On 1 October, Hercules Ho sold a treadmill that costs $5,000, with accumulated depreciation of $2,000 as at 31 Dec 2017 for cash of $3,000. Hercules Ho deposited the cash into his personal bank account. Hercules Ho forgot to inform his accountant of this transaction. According to him, the cash taken by him was to be treated as a loan to him.
Both the cost of the treadmill and the accumulated depreciation were included in the amount shown for training equipment at cost and the accumulated depreciation for training equipment in the unadjusted trial balance above. The residual value of the treadmill was originally estimated to be $500.

No depreciation has been charged for the year ended 31 Dec 2018. During the year, no additional non-current assets was purchased. The company depreciates non-current assets held at 31 Dec 2018 as follows:
 Training equipment at cost - straight line over five years. The residual value of the training equipment at cost was estimated to be $15,000.

Account Unadjusted Trial Balance Adjusted Trial Balance
Dr. ($) Cr. ($) Dr. ($) Cr. ($)
Share capital 125,000 125,000
Retained earning, 31 Dec 2017 24,688 24,688
Training equipment at cost 125,000 120,000
Furniture and fittings at cost 50,000 50,000
Accumulated deperation, 31 Dec 2017
- Training equipment 15,000 34,100
-Furniture and fittings 10,000 30,000
Prepaid insurance 9,000 9,000
Rental expense 162,500 162,500
Insurance expense 6,750 6,750
Membership fee received 302,113 296,988
Unearned membership fees 5,125
General expenses 5,090 5,090
Bad debt expense
Wages and salaries 49,850 52,338
Wages and salaries payable 2,488
Depreciation expense 41,775
Equipment maintenance expense 13,580 13,580
Interest and bank charges 110 210
Allowance for doubtful debts 195 577
Accounts receivable 7,643 7,261
Accounts payable 3,125 3,125
Hercules Ho capital 3,000
Bank 50,208 50,108
479,926 479,926 522189 521,514
0 0
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Sold Trademill
Depreciation for 9 Months ($5,000-$500)/5 Years*9/12 $        675
Accumulated Depreciaton up to 31st Dec 2016 $    2,000
Accumulated Depreciation to be reversed $    2,675
Balance of Equipment
Training Equipment Cost (From Trial) $125,000
Less: Sold $   -5,000
Remaining Equipment $120,000
Salvage Value ($15,000-$500 Sold Equipment) $ 14,500
Depreciation for the Year ($120,000-$14,500)/5 Year $ 21,100
Deprecation for 9 Months on Sold Equipment $        675
Total Accumulated Depreciation to be added $ 21,775
Beginning balance of Acc Dep $ 15,000
Add: Depreciation for the year $ 21,775
Less: Depreciation to be reversed on sold equipment $   -2,675
Ending balance of Acc dep $ 34,100
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