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 2020, the asset account, Warehouses, showed a balance of $11,660,000 (residual value $660,000), and the Accumulated Depreciation account showed a balance of $5,280,000. At the start of 2021, Warehouse #8, costing $880,000, was torn down. Materials salvaged from the demolition were sold for $116,600, and $33,000 was spent on demolition. Required Provide entries to record (a) depreciation for 2020, (b) disposal of the warehouse in 2021, and (c) depreciation for 2021. a. Depreciation for 2020 Date Account Name Dr. Cr. Dec. 31, 2020 Depreciation Expense ? ? Accumulated Depreciation ? ? b. Disposal of the warehouse in 2021 Date Account Name Dr. Cr. Jan. 01, 2021 Cash ? ? Accumulated Depreciation ? ? Building ? 880,000 c. Depreciation for 2021 Date Account Name Dr. Cr. Dec. 31, 2021 Depreciation Expense ? ? Accumulated Depreciation ? ?
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 2020, the asset account, Warehouses, showed a balance of $11,660,000 (residual value $660,000), and the Accumulated Depreciation account showed a balance of $5,280,000. At the start of 2021, Warehouse #8, costing $880,000, was torn down. Materials salvaged from the demolition were sold for $116,600, and $33,000 was spent on demolition. Required Provide entries to record (a) depreciation for 2020, (b) disposal of the warehouse in 2021, and (c) depreciation for 2021. a. Depreciation for 2020 Date Account Name Dr. Cr. Dec. 31, 2020 Depreciation Expense ? ? Accumulated Depreciation ? ? b. Disposal of the warehouse in 2021 Date Account Name Dr. Cr. Jan. 01, 2021 Cash ? ? Accumulated Depreciation ? ? Building ? 880,000 c. Depreciation for 2021 Date Account Name Dr. Cr. Dec. 31, 2021 Depreciation Expense ? ? Accumulated Depreciation ? ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Recording Entries Using Group
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 2020, the asset account, Warehouses, showed a balance of $11,660,000 (residual value $660,000), and the
Required
Provide entries to record (a) depreciation for 2020, (b) disposal of the warehouse in 2021, and (c) depreciation for 2021.
a. Depreciation for 2020
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Dec. 31, 2020 | Depreciation Expense
|
?
|
?
|
| Accumulated Depreciation
|
?
|
?
|
b. Disposal of the warehouse in 2021
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Jan. 01, 2021 | Cash | ?
|
? |
| Accumulated Depreciation
|
?
|
?
|
|
| Building
|
?
|
880,000
|
c. Depreciation for 2021
| Date | Account Name | Dr. | Cr. |
|---|---|---|---|
| Dec. 31, 2021 | Depreciation Expense
|
?
|
?
|
| Accumulated Depreciation | ? | ? | |
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