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depreciation expense

depreciation expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2017, Bonita Company purchased a building and equipment that have the following useful lives, salvage values, and costs. Building, 40-year estimated useful life, $50,400 salvage value, $799,600 cost Equipment, 12-year estimated useful life, $10,400 salvage value, $101,300 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. Bonita 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 O decimal places, e.g. 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 Depreciation Expense Accumulated Depreciation-Buildings Debit 2021 Depreciation expense Credit (b) Compute depreciation expense on the equipment for 2021. (Round answers to O decimal places, e.g. 125.)
Transcribed Image Text:On January 1, 2017, Bonita Company purchased a building and equipment that have the following useful lives, salvage values, and costs. Building, 40-year estimated useful life, $50,400 salvage value, $799,600 cost Equipment, 12-year estimated useful life, $10,400 salvage value, $101,300 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. Bonita 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 O decimal places, e.g. 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 Depreciation Expense Accumulated Depreciation-Buildings Debit 2021 Depreciation expense Credit (b) Compute depreciation expense on the equipment for 2021. (Round answers to O decimal places, e.g. 125.)
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