(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2021. (Round answers to O decimal places, eg 125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)
(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2021. (Round answers to O decimal places, eg 125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Domestic
Transcribed Image Text:On January 1, 2017, Vaughn Company purchased a building and equipment that have the following useful lives, salvage values, and
costs.
Building 40-year estimated useful life, $52,800 salvage value, $835,200 cost
Equipment, 12-year estimated useful life, $10,400 salvage value, $108.500 cost
The building has been depreciated under the double-declining-balance method through 2020. In 2021, the company decided to
switch to the straight-line method of depreciation. Vaughn also decided to change the total useful life of the equipment to 9 years,
with a salvage value of $4,800 at the end of that time. The equipment is depreciated using the straight-line method.
(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2021. (Round answers to 0 decimal
places, eg. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,
select "No Entry for the account titles and enter O for the amounts)
Account Titles and Explanation
Debit
Credit
(b) Compute depreciation expense on the equipment for 2021. (Round answers to O decimal places, eg 125)
2021 Depreciation expense $
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