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George's Cookies bought a building for $500,000 on January 1, 2020. The building has a useful life of 10 years, and a residual value of
George's Cookies bought a building for $500,000 on January 1, 2020. The building has a useful life of 10 years, and a residual value of $20,000. Part A (6 points) Assume that George's Cookies uses the double-declining balance method for depreciation. Calculate depreciation expense for Year 1 and Year 2 of the building's useful life. Please show your calculations (i.e., each piece and the total). Part B (12 points). Assume that this part is unrelated to Part A. That is, forget that you even did Part A. Again, assume that George's Cookies bought a building for $500,000 on January 1, 2020. The building has a useful life of 10 years, and a residual value of $20,000. Now, assume that George's Cookies uses the straight line method for depreciation. George's Cookies sold the building on April 1, 2021 for $400,000. Record the journal entry that George's Cookies would record for the transaction of selling the building. Please show and label your calculations (i.e., showing your logic and the pieces behind the amount in each account that is affected when you are recording this transaction)
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