Carla Cole Inc. acquired the following assets in January of2015. Equipment, estimated service life, 5 years; salvage value,$16,000 $559,000 Building, estimated service life, 30 years; nosalvage value $675,000 The equipment has been depreciated using thesum-of-the-yearsâ-digits method for the first 3 years for financialreporting purposes. In 2018, the company decided to change themethod of computing depreciation to the straight-line method forthe equipment, but no change was made in the estimated service lifeor salvage value. It was also decided to change the total estimatedservice life of the building from 30 years to 40 years, with nochange in the estimated salvage value. The building is depreciatedon the straight-line method.
(a) Prepare the general journal entry to record depreciationexpense for the equipment in 2018.
(b) Prepare the journal entry to record depreciation expense forthe building in 2018.
Carla Cole Inc. acquired the following assets in January of2015. Equipment, estimated service life, 5 years; salvage value,$16,000 $559,000 Building, estimated service life, 30 years; nosalvage value $675,000 The equipment has been depreciated using thesum-of-the-yearsâ-digits method for the first 3 years for financialreporting purposes. In 2018, the company decided to change themethod of computing depreciation to the straight-line method forthe equipment, but no change was made in the estimated service lifeor salvage value. It was also decided to change the total estimatedservice life of the building from 30 years to 40 years, with nochange in the estimated salvage value. The building is depreciatedon the straight-line method.
(a) Prepare the general journal entry to record depreciationexpense for the equipment in 2018.
(b) Prepare the journal entry to record depreciation expense forthe building in 2018.
Related questions
Lugar Company purchased a piece of machinery for $19,500 onJanuary 1, 2014, and has been depreciating the machine using thesum-of-the-years'-digits method based on a five-year estimateduseful life and no salvage value. On January 1, 2016, Lugar decidedto switch to the straight-line method of depreciation. The salvagevalue is still zero and the estimated useful life is changed to atotal of six years from the date of purchase. Ignore incometaxes.
| Prepare the appropriate journal entry, if any, to record theaccounting change Prepare the journal entry to record depreciation for 2016 |
Lugar Company purchased a piece of machinery for $33,000 onJanuary 1, 2014, and has been depreciating the machine using thesum-of-the-years'-digits method based on a five-year estimateduseful life and no salvage value. On January 1, 2016, Lugar decidedto switch to the straight-line method of depreciation. The salvagevalue is still zero and the estimated useful life is changed to atotal of six years from the date of purchase. Ignore incometaxes. |
| Required: |
| 1. | Prepare the appropriate journal entry, if any, to record theaccounting change. (If no entry is required for atransaction/event, select "No journal entry required" in the firstaccount field.) |
