Computer Consultants purchased a building for $450,000 and deprecated it on a straight-line basis over 40 years. The estimated residual value was $03,000 After using the building for 20 years, Computer realized that the building would remain useful only 14 more years Starting with the 21st year, Computer began depreciating the building over a revised total life of 34 years and decreased the residual value to $18,100 Requirement 1. Record depreciation expense on the building for years 20 and 21. (Record debits first, then credits. Exclude explanations from any journal entries.) Start by recording depreciation expense on the building for year 20 Journal Date Year 20 Accounts Debit Credit
Computer Consultants purchased a building for $450,000 and deprecated it on a straight-line basis over 40 years. The estimated residual value was $03,000 After using the building for 20 years, Computer realized that the building would remain useful only 14 more years Starting with the 21st year, Computer began depreciating the building over a revised total life of 34 years and decreased the residual value to $18,100 Requirement 1. Record depreciation expense on the building for years 20 and 21. (Record debits first, then credits. Exclude explanations from any journal entries.) Start by recording depreciation expense on the building for year 20 Journal Date Year 20 Accounts Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Computer Consultants purchased a building for $450,000 and depreciated it on a straight-line basis over 40 years. The estimated residual value was $93,000. After using the building for 20 years,
Computer realized that the building would remain useful only 14 more years Starting with the 21st year, Computer began depreciating the building over a revised total life of 34 years and decreased the
residual value to $18,100.
Requirement
1. Record depreciation expense on the building for years 20 and 21. (Record debits first, then credits. Exclude explanations from any journal entries.)
Start by recording depreciation expense on the building for year 20
Journal
Date
Year 20
Accounts
Debit
Credit
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