On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Residual Value Estimated Useful Life (in years) Asset Cost 125,e00 550,000 Land N/A N/A Building Equipment none 20 12% of cost 190,e00 185, е0е Vehicles $13,000 10 Total $1,050,000 On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $105,000 was sold for $85,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2021. 2. Prepare the journal entries to redord the depreciation on the equipment sold on June 29, 2022, and the sale of equipment. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute depreciation expense on the building, remaining equipment, and vehicles for 2022. (Do not round intermediate calculations.) Depreciation Expense Building Equipment Vehicles

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows:

Asset	Cost		Estimated Residual Value	Estimated Useful Life (in years)
Land	$	125,000			N/A	N/A
Building		550,000			none	20
Equipment		190,000			12% of cost	8
Vehicles		185,000		$	13,000		10
Total	$	1,050,000

On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $105,000 was sold for $85,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service.

Required:

1. Compute depreciation expense on the building, equipment, and vehicles for 2021.
2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2022, and the sale of equipment.
3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.

On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total
purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows:
Estimated Residual
Estimated Useful
Value
Life (in years)
Asset
Cost
Land
$
125,000
N/A
N/A
Building
Equipment
Vehicles
550, 000
none
20
190, eeе
12% of cost
8
185,000
$13,000
10
Total
$1,050, 000
On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $105,000 was sold for $85,000. Herzog uses the
straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year
depreciation is calculated based on the number of months an asset is in service.
Required:
1. Compute depreciation expense on the building, equipment, and vehicles for 2021.
2. Prepare the journal entries to redord the depreciation on the equipment sold on June 29, 2022, and the sale of equipment.
3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.
Complete this question by entering
swers in the tabs below.
Required 1
Required 2
Required 3
Compute depreciation expense on the building, remaining equipment, and vehicles for 2022. (Do not round intermediate
calculations.)
Depreciation
Expense
Building
Equipment
Vehicles

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