Vaughn Ltd. purchased a building on January 1, 2021 for $14,610,000. Vaughn accounted for this asset using the revaluation model and revalued the building every two years. The building was estimated to have a useful life of 30 years with no residual value, and Vaughn used straight-line depreciation. On December 31, 2022, the building had a fair value of $13,832,000. On December 31, 2024, the building had a fair value of $12,564,600. Prepare the journal entries on the following dates on the books of Vaughn Ltd. to revalue the building using the asset adjustment method. (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 all debit entries before credit entries. Round answer to O decimal places, e.g. 5,275. Record entries in the order presented in the problem.)

Vaughn Ltd. purchased a building on January 1, 2021 for $14,610,000. Vaughn accounted for this asset using the revaluation model and revalued the building every two years. The building was estimated to have a useful life of 30 years with no residual value, and Vaughn used straight-line depreciation. On December 31, 2022, the building had a fair value of $13,832,000. On December 31, 2024, the building had a fair value of $12,564,600. Prepare the journal entries on the following dates on the books of Vaughn Ltd. to revalue the building using the asset adjustment method. (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 all debit entries before credit entries. Round answer to O decimal places, e.g. 5,275. Record entries in the order presented in the problem.)

Name: Vaughn Ltd. purchased a building on January 1, 2021 for $14,610,000.
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Description: Vaughn Ltd. purchased a building on January 1, 2021 for $14,610,000. Vaughn accounted for this asset using the revaluation modeland revalued the building every two years. The building was estimated to have a useful life of 30 years with no residual

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

Vaughn Ltd. purchased a building on January 1, 2021 for $14,610,000. Vaughn accounted for this asset using the revaluation model
and revalued the building every two years. The building was estimated to have a useful life of 30 years with no residual value, and
Vaughn used straight-line depreciation. On December 31, 2022, the building had a fair value of $13,832,000. On December 31, 2024,
the building had a fair value of $12,564,600.
Prepare the journal entries on the following dates on the books of Vaughn Ltd. to revalue the building using the asset adjustment
method. (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 all debit entries before credit entries. Round answer to O decimal places, e.g.
5,275. Record entries in the order presented in the problem.)
Date
<
Account Titles and Explanation
(To eliminate Accumulated depreciation.)
(To adjust building account to fair value.)
(To eliminate Accumulated depreciation.)
(To adjust building account to fair value.)
Debit
1
Credit

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