Blossom Company purchased a warehouse on January 1, 2019, for $480,000. At the time of purchase, Blossom anticipated that the warehouse would be used to facilitate the expansion of its product lines. The warehouse is being depreciated over 20 years and is expected to have a residual value of $60,000. At the beginning of 2024, the company decided that the warehouse would no longer be used and should be sold for its carrying amount. At the end of 2024, the warehouse still had not been sold, and its net realizable value was estimated to be only $312,000. Prepare all the journal entries that Blossom should make during 2024 related to the warehouse. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry isrequired,select Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the Amounts. List debit entry before credit entry.)
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Blossom Company purchased a warehouse on January 1, 2019, for $480,000. At the time of purchase, Blossom anticipated that the warehouse would be used to facilitate the expansion of its product lines. The warehouse is being
Prepare all the
Do not indent manually. If no entry isrequired,select Indent manually.
If no entry is required, select "No Entry" for the account titles and enter 0 for the Amounts. List debit entry before credit entry.)
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