io Company owns 10 warehouses of similar type except for varying size. The group system of depreciation is applied to the 10 warehouses, and the rate is 6% each year on cost. At the end of Year 1, the asset account, Warehouses, showed a b sidual value $1,200,000), and the Accumulated Depreciation account showed a balance of $9,600,000. At the start of Year 2, Warehouse #8, costing $1,600,000, was torn down. Materials salvaged from the demolition were sold for $212,000, ar demolition. quired Ovide entries to record (a) depreciation for Year 1, (b) disposal Date Dec. 31, Year 1 Jan. 1, Year 2 Dec. 31, Year 2 Account Name To record depreciation. To record disposal. Warehouse #8 in Year 2, and (c) depreciation for Year 2. Dr Cr.
io Company owns 10 warehouses of similar type except for varying size. The group system of depreciation is applied to the 10 warehouses, and the rate is 6% each year on cost. At the end of Year 1, the asset account, Warehouses, showed a b sidual value $1,200,000), and the Accumulated Depreciation account showed a balance of $9,600,000. At the start of Year 2, Warehouse #8, costing $1,600,000, was torn down. Materials salvaged from the demolition were sold for $212,000, ar demolition. quired Ovide entries to record (a) depreciation for Year 1, (b) disposal Date Dec. 31, Year 1 Jan. 1, Year 2 Dec. 31, Year 2 Account Name To record depreciation. To record disposal. Warehouse #8 in Year 2, and (c) depreciation for Year 2. Dr Cr.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Recording Entries Using Group Depreciation Method
Ohio Company owns 10 warehouses of similar type except for varying size. The group system of depreciation is applied to the 10 warehouses, and the rate is 6% each year on cost. At the end of Year 1, the asset account, Warehouses, showed a balance of $21,200,000
(residual value $1,200,000), and the Accumulated Depreciation account showed a balance of $9,600,000. At the start of Year 2, Warehouse #8, costing $1,600,000, was torn down. Materials salvaged from the demolition were sold for $212,000, and $60,000 was spent
on demolition.
Required
Provide entries to record (a) depreciation for Year 1, (b) disposal of Warehouse #8 in Year 2, and (c) depreciation for Year 2.
Date
a. Dec. 31, Year 1
b. Jan. 1, Year 2
c. Dec. 31, Year 2
Account Name
To record depreciation.
To record disposal.
To record depreciation.
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Dr.
Cr.
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