P 11-6 Depreciation methods; partial-year depreciation; sale of assets L011-2 On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,000,000 to the various types of assets along with estimated useful lives and residual values are as follows: Asset Land Building Equipment Vehicles Total Cost $ 100,000 500,000 240,000 160,000 $1,000,000 Estimated Residual Estimated Useful Value Life (in years) N/A N/A none 25 10% of cost 8 $12,000 8 On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $100,000 was sold for $80,000. Herzog uses the straight-line depreciation method for buildings and equipment and the double-declining balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service. Required: 1. Compute depreciation expense on the building, equipment, and vehicles for 2021. 2. Prepare the journal entries for 2022 to record (a) depreciation on the equipment sold on June 29, 2022, and (b) the sale of the equipment. Round to the nearest whole dollar amount. 3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022. Requirement 1: Building: Cost Estimated life Straight-line rate Equipment Cost Estimated life Residual Value Straight-line rate Vehicles: Cost Double-declining-balance rate Months in service Requirement 2: General Journal Account Debit Credit a. 6/29/2022 Machinery sold 6/29/2014: Cost at 3/31/13 Estimated life Residual Value Straight-line rate b. 6/29/2012 2021 Depreciation: Cost at 3/31/21 Estimated life Residual Value Straight-line rate 2022 Depreciation: Cost at 3/31/21 Estimated life Residual Value Straight-line rate Requirement 3: Building: Cost at 3/31/21 Estimated life Straight-line rate Equipment: Cost at 3/31/21 Estimated life Residual Value Straight-line rate Vehicles: Cost Residual value Double-declining-balance rate Months in service