On January 1, 2015, McElroy plc purchased a building and equipment that have 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 has been depreciated under the double-declining-balance method through 2018. In 2019, the company decided to switch to the straight-line method of depreciation. McElroy also decided to change the total useful life of the equipment to 9 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 2019.
b. Compute depreciation expense on the equipment for 2019.