On January 1, 2013, Zui Corporation purchased a building and equipment that had the following useful lives,

Question:

On January 1, 2013, Zui Corporation purchased a building and equipment that had the following useful lives, residual values, and costs:

Building: 40-year estimated useful life, $50,000 residual value, $1,200,000 cost

Equipment: 12-year estimated useful life, $10,000 residual value, $130,000 cost

The building was depreciated under the double-declining-balance method through 2016. In 2017, the company decided to switch to the straight-line method of depreciation because of a change in the pattern of benefits received. In 2017, Zui decided to change the equipment's total useful life to 15 years, with a residual value 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 2017. (Ignore income tax effects.)

(b) Calculate the depreciation expense on the equipment for 2017. (Ignore income tax effects.)

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...