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On March 31, 2016, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $990,000 to
On March 31, 2016, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $990,000 to the various types of assets along with estimated useful lives and residual values are as follows:
3. | Compute depreciation expense on the building, remaining machinery, and equipment for 2017. (Do not round intermediate calculations.) | |
Building : Machinery: Equipment : |
Estimated Residual Estimated Useful Value Asset Cost Life in Years 105,000 NA Land N/A Building 490,000 none 20 12% of cost Machinery 290,000 10 Equipment 105.000 $13,000 Total 990,000 On June 29, 2017, machinery included in the March 31, 2016, purchase that cost $99,000 was sold for $79,000. Herzog uses the straight-line depreciation method for buildings and machinery and the sum-of- the method for equipment. Partial-year depreciation is calculated based on the number of months an asset service. Required 1. Compute depreciation expense on the building, machinery, and equipment for 2016. (Do not round intermediate calculations.) Depreciation Expense Building Machinery Equipment 2. Prepare the journal entries to record the depreciation on the machinery sold on une 29, 2017, and the sale of machinery. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account fi view transaction list view general journal Journal Entry Worksheet 1 2 Record the depreciation on machinery sold. General Journal Debit Credit Date June 29, 2017
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