Riverbed Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5 years; salvage value, $14,500 Building, estimated service life, 30 years; no salvage value $536,500 $669,000 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) (b) Prepare the general journal entry to record depreciation expense for the equipment in 2021. Prepare the journal entry to record depreciation expense for the building in 2021.

Riverbed Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5 years; salvage value, $14,500 Building, estimated service life, 30 years; no salvage value $536,500 $669,000 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) (b) Prepare the general journal entry to record depreciation expense for the equipment in 2021. Prepare the journal entry to record depreciation expense for the building in 2021.

Name: Riverbed Cole Inc. acquired the following assets in January of 2018.E
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Riverbed Cole Inc. acquired the following assets in January of 2018.Equipment, estimated service life, 5 years; salvage value, $14,500Building, estimated service life, 30 years; no salvage value$536,500$669,000The equipment has been depreciated usin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation…

A: Cost2752Less; Accumulated Depreciation using doube declining1936Carry Amount, beg 0f 2024816Less…

Q: Swifty Corporation uses the straight-line method of depreciation. The company's fiscal year end is…

A: Sales tax and shipping cost will be capitalise to equipment. Cost of equipment will be…

Q: Starz service uses the straight-line method of depreciation. The company’s fiscal year-end is…

A: Purchasing of an asset is not expensed in the same period in which it is purchased. The cost of…

Q: Concord Company is in the process of preparing its financial statements for 2025. Assume that no…

A: Solution for Asset 1- Given,Cost of Equipment (January 2,2022) = $86,600Useful life= 10 YearsSalvage…

Q: Sheffield Cole Inc. acquired the following assets in January of 2023. Equipment, estimated useful…

A: Depreciation is defined as the fall in the value of fixed assets due it their uses and time spent on…

Q: Sandhill Corporation uses straight-line depreciation, prepares adjusting entries annually, and has a…

A: The impairment loss is calculated as difference between the book value of an asset and fair value of…

Q: Wildhorse Co. purchased a machine on January 1, 2018, for $500,500. At that time, it was estimated…

A: Straight line depreciation is a common and simplest method of calculation depreciation.As per this…

Q: On January 1, 2021, Ayayai Company purchased on credit machinery costing $193,500 and incurred…

A: The question is related to Depreciation Accounting of Fixed Assets. General Information givenCost of…

Q: On January 1, 2025, Sunland Corp, acquired a machine at a cost of $960000. It is to be depreciated…

A: Step 1:Computation of the annual depreciation expense on the machine using the straight-line…

Q: Concord Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service…

A: Journal entry is a process of recording and classifying business transactions into books of accounts…

Q: ent has been depreciated using the sum-of-the-years"e company decided to change the method of…

A: Equipment : Sum of year digit = 5+4+3+2+1 = 15Accumulated depreciation 2018 to 2021 =…

Q: Teal Co. purchased a machine on January 1, 2018, for $588,500. At that time, it was estimated that…

A: Depreciation is the systematic decline in the value of non-current assets as a result of wear and…

Q: Wildhorse Company uses the straight-line method of depreciation. The company's fiscal year end is…

A: Journal Entries - Journal Entries are the recording of transactions of the organization. It is…

Q: On October 1, 2021, Hess Company places a new asset into service. The cost of the asset is $120,000…

A: Depreciation expense: Depreciation expense is the reduction in a particular asset due to its use or…

Q: On January 1, 2022, Sheridan Corporation acquired equipment at a cost of $777000. Sheridan adopted…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

Q: For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation…

A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…

Q: Whispering Cole Inc. acquired the following assets in January of 2018. Equipment, estimated…

A: Answer a) Journal Entry Year end Account Titles and Explanation Debit Credit 2021 Depreciation…

Q: The Canliss Milling Company purchased machinery on January 2, $930,000. A five-year life was…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: Cullumber Company purchased a machine on January 1, 2019, for $1008000. At the date of acquisition,…

A: A change in accounting estimate is an adjustment to the carrying amount of an asset and this change…

Q: On January 1, 2019, Ivanhoe Corporation acquired machinery at a cost of $1200000. Ivanhoe adopted…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. firm can use…

Q: Whispering Company owns equipment that cost $100,000 when purchased on January 1, 2019. It has been…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: SEAT Inc. acquired the following assets in January of 2015. Equipment, estimated service…

A: An accounting technique called depreciation is used to distribute an asset's cost over the course of…

Q: Equipment, estimated service life, 5 years; salvage value, $14,600 Building, estimated service life,…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: Oriole Company owns equipment that cost $120,000 when purchased on January 2, 2024. It has been…

A: The journal entries are prepared to record the transactions on a regular basis. The gain or loss on…

Q: The Canliss Milling Company purchased machinery on January 2, 2019, for $800,000. A five-year life…

A: Calculation of depreciation value over remaining 3 years: Particulars Amount Cost of the…

Q: 19, Ivanhoe Corporation acquired equipment at a cost of $858000. Ivanhoe adopted the…

A: Solution: Sum of years digits = 8+7+6+5+4+3+2+1 = 36 Accumulated Depreciation for 2019, 2020, 2021 =…

Q: Blossom Limited sold equipment on September 30, 2024, for $37,870 cash. The equipment originally…

A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…

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.

Topic Video

Question

Riverbed Cole Inc. acquired the following assets in January of 2018.
Equipment, estimated service life, 5 years; salvage value, $14,500
Building, estimated service life, 30 years; no salvage value
$536,500
$669,000
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.
(Round answers to O 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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Calculation of Depreciation expenses for the Equipment of Riverbed Cole Inc. in 2021.

VIEW

Step 2: Calculation of Depreciation expenses for the Building of Riverbed Cole Inc. in 2021.

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 7 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Waterway Company purchased a computer system for $86,700 on January 1, 2019. It was depreciated based on a 8-year life and an $16,700 salvage value. On January 1, 2021, Waterway revised these estimates to a total useful life of 4 years and a salvage value of $10,500. Waterway uses straight-line depreciation Prepare Waterway's entry to record 2021 depreciation expense. (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.) Account Titles and Explanation Debit Credit
Marigold Company owns equipment that cost $79,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,900 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Marigold Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) (b) (c) (d) (e) (A) SR. Account Titles and Explanation (a) (b) Sold for $45,000 on January 1, 2022. Sold for $45,000 on April 1, 2022. Sold for $17,000 on January 1, 2022. Sold for $17,000 on September 1, 2022 Repeat (a), assuming Marigold uses double-declining balance…
Vinubhai
Tamarisk Cole Inc. acquired the following assets in January of 2018. Equipment, estimated service life, 5 years; salvage value, $15,500 $546,500 Building, estimated service life, 30 years; no salvage value $639,000 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. (Round answers to 0 decimal places,…
At the beginning of 2021, Westglow Company purchased equipment for $525,000 that was assigned an estimated useful life of 5 years and an estimated salvage value of $50,000. The company uses straight-line depreciation for all of its plant and equipment. When preparing adjusting entries at December 31, 2024, it was discovered that the bookkeeper had failed to deduct the salvage value in computing the depreciation base for 2021, 2022, and 2023. Westglow issues 2-year comparative financial statements. Which of the following statements describes the procedure that should be followed at December 31, 2024? Answer a. Westglow should compute the amount of annual depreciation expense that should have been recorded for 2023 and adjust accumulated depreciation and depreciation expense for the difference. The financial statements for 2023 should be restated and the effect of the error should be reported as an adjustment to the beginning balance of retained earnings for 2024. b.…
Do not provide image in solution.and provide detailed explanation.
For financial reporting, Kumas Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2021 for $2,736,000. Its useful life was estimated to be six years with a $204,000 residual value. At the beginning of 2024, Kumas decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Declining Balance Difference Year 2021 Straight- Line $ 422 $ 912 $ 490 2022 2023 422 422 608 186 405 (17) $ 1,266 $ 1,925 $ 659 Required: 2. Prepare any 2024 journal entry related to the change. Note: Enter you answers rounded to the nearest dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the adjusting entry for depreciation in 2024. Note: Enter debits before credits. Event 1 General Journal Debit Credit Record entry Clear entry View general journal
A company purchased a piece of equipment for $30,000 on January 1, 2019. Management estimates salvage value of $3,000 and a useful life of five years. It uses the straight‐line method of depreciation. Where applicable, it applies the half‐year rule. On December 31, 2021 the equipment’s fair value is estimated to be $3,000. What is the impairment loss for 2021? $3,000 $5,400 $7,800 $10,800
Blue Company purchased a computer system for $87,300 on January 1, 2024. It was depreciated based on a 8-year life and an $19,700 salvage value. On January 1, 2026, Blue revised these estimates to a total useful life of 4 years and a salvage value of $9,100. Prepare Blue's entry to record 2026 depreciation expense. Blue uses straight-line depreciation. (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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
On 1/1/19, O. Corp acquired equipment at a cost of $867k. O. Corp adopted the sum-of-the-yrs-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of 8 yrs, with no residual value. At the beginning of 2022, a decision was made to change to the straight-line method of depreciation for this equipment. The depreciation expense for 2022 would be $173400 $72250 $45156 $108375
On January 1, 2022, Oriole Corporation acquired equipment at a cost of $759000. Oriole adopted the sum-of-the-years-digits method of depreciation for this equipment and had been recording depreciation over an estimated life of 8 years, with no residual value. At the beginning of 2025, a decision was made to change to the straight-line method of depreciation for this equipment. Depreciation expense for 2025 would be $63250. $151800. O $94875. O $39531.