Equipment, estimated service life, 5 years; salvage value, $14,600 Building, estimated service life, 30 years; no salvage value $566,600 $645,000 The equipment has been depreciated using the sum-of-the-years'-digits method for the first 3 years for financial reporting purposes. company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to o change in the estimated salvage value. The building is depreciated on the straight-line method. a) Prepare the general journal entry to record depreciation expense for the equipment in 2021. (b) Prepare the journal entry to record depreciation expense for the building in 2021.
Equipment, estimated service life, 5 years; salvage value, $14,600 Building, estimated service life, 30 years; no salvage value $566,600 $645,000 The equipment has been depreciated using the sum-of-the-years'-digits method for the first 3 years for financial reporting purposes. company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to o change in the estimated salvage value. The building is depreciated on the straight-line method. a) Prepare the general journal entry to record depreciation expense for the equipment in 2021. (b) Prepare the journal entry to record depreciation expense for the building in 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sheridan Cole Inc. acquired the following assets in January of 2018.
Equipment, estimated service life, 5 years; salvage value, $14,600
Building, estimated service life, 30 years; no salvage value
The equipment has been depreciated using the sum-of-the-years'-digits method for the first 3 years for financial reporting purposes. In 2021, the
company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the
estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with
no change in the estimated salvage value. The building is depreciated on the straight-line method.
(a) Prepare the general journal entry to record depreciation expense for the equipment in 2021.
(b) Prepare the journal entry to record depreciation expense for the building in 2021.
$566,600
$645,000
(Round answers to 0 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 0 for the amounts.)
No. Account Titles and Explanation
(a)
(b)
Debit
Credit
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