On January 1, 2017, Bonita Company purchased a building and equipment that have the following useful lives, salvage values, andcosts.Building, 40-year estimated useful life, $50,400 salvage value, $799,600 costEquipment, 12-year estimated useful life, $10,400 salvage value, $101,300 costThe building has been depreciated under the double-declining-balance method through 2020. In 2021, the company decided to switchto the straight-line method of depreciation. Bonita also decided to change the total useful life of the equipment to 9 years, with asalvage 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 "NoEntry" for the account titles and enter O for the amounts.)Account Titles and ExplanationDepreciation ExpenseAccumulated Depreciation-BuildingsDebit2021 Depreciation expenseCredit(b) Compute depreciation expense on the equipment for 2021. (Round answers to O decimal places, e.g. 125.)

Deprecation is a non cash expense that’s charged to profit and loss account. Also, it gets reduced…

Answered: depreciation expense

Business

Accounting

depreciation expense

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Required information [The following information applies to the questions displayed below.] The…

A: In this question, we need to compute and record the depreciation expense for the cooktop. We know…

Q: Depreciation represents a __________ in the value of fixed assets.

A: Fixed assets are those type of assets which are being held by the business for longer period of…

Q: depreciation

A: The conservative principle of accounting states that recognize expenses and losses as much as can be…

Q: Where Are Depreciation Expenses Reflected in a Financial Statement?

A: DEPRECIATION EXPENSES Depreciation Expense Means Gradual Decrease in the Value of an Assets due…

Q: Explain how the depreciation method selected affects the balance sheet and income statement

A: Depreciation is the loss in the value of the asset caused due to its usage, wear, and tear. There…

Q: The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in…

A: Depreciable cost is that portion of cost of asset which can be depreciated. Trade in value relates…

Q: What are the effects of depreciation on the profit and loss account and balance sheet?

A: INTRODUCTION: A depreciation plan or chart makes it easier for organizations to keep track of…

Q: Cost when acquired $36,000 Estimated salvage value $2,000 Estimated useful life 10 years Method of…

A: Depreciation is the value of an asset that is decreased over the period of time. It is known as the…

Q: 1. Mr Hidayat is a sole trade who maintain his non-current asset at cost. On 31 December 2019, he…

A: Assets reduces their values each year which is said to be depreciation.

Q: A general description of the depreciation methods applicable to major classes of depreciable assets?

A: Depreciation is the allocation of cost of the asset over the useful life of the asset. Depreciation…

Q: Dick owns a house that he rents to college students. Dick receives $800 per month rent and incurs…

A: Since the house property is fully depreciated there will be no depreciation expense for the year.

Q: The cost of an asset that is subject to depreciation os called?

A: Assets: Assets are those resources that are owned by the business organization which has an economic…

Q: Depreciation should be applied to a new long-lived item over what time period? Explain

A: This question explains about applied to a new long-lived item over what time period.

Q: What is the relationship between depreciation and net income?

A: Depreciation is the part of cost of a asset which is charged to income statement yearly as a expense…

Q: w to determine what depreciation should be used

A: Solution Concept Depreciation Depreciation refers to the expense that is recorded…

Q: Depreciation expense is used to

A: Depreciation is gradual decrease in the value of asset due to normal wear and tear, obsolescence and…

Q: ears, with a predicted 0.8 billion RMB/year revenue and operation fee 0.45 billion RMB plus erprise…

A: Straight line method of depreciation is mostly used by accountant even though not so accurate but…

Q: Question. Where Are Depreciation Expenses Reflected in a Financial Statement?

A: The main financial statements of the business include the income statement and balance sheet. The…

Q: How did we get the depreciation expense delivery van

A: Depreciation is normal wear and tear of assetIt can be calculated in many ways out of which one…

Q: 2. Lepat Trading prepared its account on 30 June every year. On 30 June 2019, the statement of…

A: Following is the answer to given question

Q: at formula for depreciation expense

A: Depreciation is an accounting concept that distributes the expense of a physical item across its…

Q: Explain the suitability of the depreciation method.

A: SOLUTION- Depreciation is an accounting method of allocating the cost of a tangible or physical…

Q: Laurier Ltd. purchased a delivery truck on May 1, 2021, at a cost of $77,160. The truck is expected…

A: ANSWER Purchase cost of delivery truck = 77160 purchase date = May 1,2021…

Q: What factors must be known or estimated in order to compute depreciation expense?

A: Definition: Depreciation: Depreciation is a decrease in the value of the fixed assets over a period…

Q: What is the difference between amortization and depreciation, and how are they applied to intangible…

A: Intangible assets are those that are not physical yet have value to their owner despite having no…

Q: declining-balance method of depreciation meaning

A: Depreciation is a process of allocating the total cost of an asset to an expense over assets useful…

Question

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.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Describe the accounting changes in depreciation.
Please find the depreciation expenses thanku
Name depreciation methods that deduct residual value before an asset is depreciated.
Chapter : Depreciation and Provision for Depreciation
How does depreciation expense differ from other operatingexpenses?
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
Distinguish among depreciation, depletion, and amortization.
Explain how depreciation expense satisfies the definition of an expense
Why are the cost of plant/long term assets recovered through depreciation vs. expensed out during the period purchased?
. What is depreciation, and how is it computed