Hearts Inc acquired the following assets in January 2012 Equipment, estimated service life, 5 years no salvage value $650,000 Building, estimated service life, 40 years salvage value , $500,000 $5,500,000 The equipment has been depreciated using the double declining balance method for the first 2 y...

a Depreciation to date on equipment Doubledeclining balance depreciation 2 ...

Hearts Inc. acquired the following assets in January 2012. Equipment, estimated service life, 5 years; no salvage

Question:

Hearts Inc. acquired the following assets in January 2012.
Equipment, estimated service life, 5 years; no ......$650,000
Building, estimated service life, 40 years; , $500,000.... $5,500,000
The equipment has been depreciated using the double-declining balance method for the first 2 years for financial reporting purposes. In 2014, 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 . It was also decided to change the total estimated service life of the building from 40 years to 35 years, with no change in the estimated . The building is depreciated on the straight-line method.

Instructions
(a) Prepare the general journal entry to record depreciation expense for the equipment in 2014.
(b) Prepare the journal entry to record depreciation expense for the building in 2014.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...