On January 1, 2022, Nash Corporation purchased a building to use as its factory, as well as some equipment in order to manufacture its product. The following information was determined at the time of purchase: Cost Useful Life Residual Value Depreciation Building $2,250,000 20 years $450,000 Double Declining Equipment $950,000 25 years $95,000 Straight-Line On January 1, 2025, Nash decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building. Nash also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $46,000. The depreciation method for the equipment did not change. (Credit account titles are automatically indented when the 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. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.) a. Prepare the journal entries to record depreciation for the building for 2025.

On January 1, 2022, Nash Corporation purchased a building to use as its factory, as well as some equipment in order to manufacture its product. The following information was determined at the time of purchase: Cost Useful Life Residual Value Depreciation Building $2,250,000 20 years $450,000 Double Declining Equipment $950,000 25 years $95,000 Straight-Line On January 1, 2025, Nash decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building. Nash also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $46,000. The depreciation method for the equipment did not change. (Credit account titles are automatically indented when the 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. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.) a. Prepare the journal entries to record depreciation for the building for 2025.

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Description: On January 1, 2022, Nash Corporation purchased a building to use as its factory, as well as some equipment in order to manufactureits product. The following information was determined at the time of purchase:CostUseful LifeResidual ValueDepreciation

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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Concept explainers

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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Question

On January 1, 2022, Nash Corporation purchased a building to use as its factory, as well as some equipment in order to manufacture
its product. The following information was determined at the time of purchase:
Cost
Useful Life
Residual Value
Depreciation
Building
Equipment
$2,250,000
20 years
$450,000
Double Declining
$950,000
25 years
$95,000
Straight-Line
On January 1, 2025, Nash decided to change the depreciation method for the building to the straight-line method, as a result of a
change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building.
Nash also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $46,000. The
depreciation method for the equipment did not change. (Credit account titles are automatically indented when the 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. Round answers to O decimal
places, e.g. 5,275. List all debit entries before credit entries.)
a.
Prepare the journal entries to record depreciation for the building for 2025.

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