Champion Company Purchased and Installed Carpet in Its New General

question 195

Essay

Champion Company purchased and installed carpet in its new general offices on March 31 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.​
(a)Prepare the journal entries necessary for recording the purchase of the new carpet.
(b)​Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet assuming that Champion Company uses the straight-line method.

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Definitions:

Job Costing

A cost accounting method used to track costs to a specific job or project, allowing companies to calculate its profitability.

Process Costing

A costing methodology used in manufacturing where costs are allocated to products based on the processes they go through.

Bill of Materials

A bill of materials is a comprehensive list of raw materials, components, and instructions required to construct, manufacture, or repair a product or service.

Source Document

An original record or document that provides evidence of a financial transaction, used as proof for recording the transaction in accounting systems.