Golden Sales Has Bought $135,000 in Fixed Assets on January

question 139

Essay

Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these assets is estimated at $10,000 after they service their 4 year service life. Golden Sales managers want to evaluate the options of depreciation.
(a) Compute the annual straight-line depreciation and provide the sample depreciation journal entry to be posted at the end of each of the years.
(b) Write the journal entries for each year of the service life for these assets using the double- declining balance method.

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Definitions:

Perfectly Elastic

A situation in economic theory where the quantity demanded or supplied responds infinitely to changes in price.

Perfectly Inelastic

A situation in which the demand for a good or service does not change in response to changes in price.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating greater responsiveness.

Degree of Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, providing insight into the good's price sensitivity.