In-class activity # 14 Plant Asset Calculations

Compute and record depreciation after a change in useful life of the asset - Seven Flags over Georgia paid $180,000 for a concession stand. Seven Flags started out depreciating the building using straight-line over 10 years with zero residual value. After using the concession stand for 6 years, Seven Flags determines that the building will remain useful for only 2 more years. Record Seven Flags depreciation on the concession stand for year 7 by the straight-line method.

Date Accounts and Explanations Post. Ref. Debit Credit

Compute depreciation; record a gain or loss on disposal) - On January 1, 2013, Regal Manufacturing purchased a machine for $850,000. Regal Manufacturing expects the machine to remain useful for eight years and to have a residual value of $40,000. Regal Manufacturing uses the straight-line method to depreciate its machinery. Regal Manufacturing used the machine for five years and sold it on January 1, 2018, for $325,000.

1. Compute accumulated depreciation on the machine at January 1, 2018 (same as December 31, 2017).