amortization
Question
Amortization problem?
Please help me figure this out, I'm totally confused. Vehicles purchased Jan 1, 2007 cost - $62,000 amortized for 4 years Trial balance for Dec. 31, 2008 has Accrued amortization - vehicles at $15,500. Is this not the correct answer and does not require an adjustment? I'm afraid I am missing something.
1 month ago - 2 answers
Best Answer
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Vehicles cost - $62,000 If amortization is over 4 yrs, each yr's amortization is $15,500. By Dec 31, 2008, there shd be 2 yrs' accumulated amortization in the acccounts, i.e. $31,000, but your trial balance shows only $15,500. That means you have amortized the vehicles only for the 1st yr. You haven't amortized them for 2008. You do require an adjustment: Dr Amortization - vehicles $15,500 Cr Accumulated amortization - vehicles $15,500
by Sandy
1 month ago
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Other Answers
if amortizing over 4 years then after 2 years half of the vehicle cost should be amortized. $31,000 should be in accrued amortization at Dec 31, 2008, which is halfway thru the 4 year life.
by David Z- 1 month ago