Question
On January 1, 2013, Powell Company purchased a building and machinery that have the following useful lives, salvage value, and costs. Building, 25-year estimated useful
On January 1, 2013, Powell Company purchased a building and machinery that have the following useful lives, salvage value, and costs.
Building, 25-year estimated useful life, $9,000,000 cost, $900,000 salvage value
Machinery, 10-year estimated useful life, $1,200,000 cost, no salvage value
The building has been depreciated under the straight-line method through 2017. In 2018, the company decided to switch to the double-declining balance method of depreciation for the building. Powell also decided to change the total useful life of the machinery to 8 years, with a salvage value of $60,000 at the end of that time. The machinery is depreciated using the straight-line method.
Instructions
(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2018.
(b) Compute depreciation expense on the machinery for 2018.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started