eBook

Question $2$

Not complete

Marked out of $1\mathrm{.}67$

Flag question

Recording Entries Using Group Depreciation Method

Ohio Company owns $10$ warehouses of similar type except for varying size. The group system of depreciation is applied to the $10$ warehouses, and the rate is $6\%$ each year on cost$.$ At the end of Year $1,$ the asset account, Warehouses, showed a balance of $$17,490,000($residual value $$990,000),$ and the Accumulated Depreciation account showed a balance of $$7,920,000.$ At the start of Year $2,$ Warehouse #$8,$ costing $$1,320,000,$ was torn down. Materials salvaged from the demolition were sold for $$174,900,$ and $$49,500$ was spent on demolition.

Required

Provide entries to record $($a$)$ depreciation for Year $1,($b$)$ disposal of Warehouse #$8$ in Year $2,$ and $($c$)$ depreciation for Year $2.$

$\backslash$table$[[$Date$,$Account Name,Dr$.,$Cr$.],[$a$.$ Dec. $31,$ Year $1,,0,0],[,,0,0],[,$To record depreciation.,,$],[$b$.$ Jan. $1,$ Year $2,,0,0],[,,0,0],[,,,0],[$c$.$ Dec. $31,$ Year $2,,0,0],[,,0,0]]$