On January 1, 2004, Jackson Company purchased a building and equipment that have the following useful lives, salvage value s, and costs Building, 40 year estimated useful life, $50,000 salvage value , $800,000 cost Equipment, 12 year estimated useful life, $10,000 salvage value , $100,000 cost The ...

a Computation of depreciation for 2008 Cost of building 800000 Le ...

On January 1, 2004, Jackson Company purchased a building and equipment that have the following useful lives,

Question:

On January 1, 2004, Jackson Company purchased a building and equipment that have the following useful lives, s, and costs.
Building, 40-year estimated useful life, $50,000 , $800,000 cost
Equipment, 12-year estimated useful life, $10,000 , $100,000 cost
The building has been depreciated under the double-declining balance method through 2007. In 2008, the company decided to switch to the straight-line method of depreciation. Jackson also decided to change the total useful life of the equipment to 9 years, with a of $5,000 at the end of that time. The equipment is depreciated using the straight-line method.
Instructions
(a) Prepare the journal entry (ies) necessary to record the depreciation expense on the building in 2008.
(b) Compute depreciation expense on the equipment for 2008.

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...