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Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjusting entries for annual financial statements. Boland computes depreciation and records it as:

Depreciation Expense — Equipment . . . . . . . . . . . . . . . 123,000 
   Accumulated Depreciation — Equipment . . . . . . . . .                       123,000 

Smith agrees with her computation but says the credit entry should be directly to the Equipment account. Smith argues that while accumulated depreciation is technically correct, “it is less hassle not to use a contra account and just credit the Equipment account directly. And besides, the balance sheet shows the same amount for total assets under either method.”

 


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Answer #1

giving the net amount os wD amount in the LID BShoding the Asser Amount ca cos n the ete Am 5,00 b it Req uise the Discloesus

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Answer #2

I support Boland decision of crediting accumulated depreciation

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