Question
Required information Problem 7-7A Compute depreciation, amortization, and book value of long-term assets (LO7-4, 7-5) [The following information applies to the questions displayed below.] Solich
Required information
Problem 7-7A Compute depreciation, amortization, and book value of long-term assets (LO7-4, 7-5)
[The following information applies to the questions displayed below.]
Solich Sandwich Shop had the following long-term asset balances as of December 31, 2021:
Accumulated | ||||||||||||
Cost | Depreciation | Book Value | ||||||||||
Land | $ | 76,000 | $ | 76,000 | ||||||||
Building | 441,000 | $ | (158,760 | ) | 282,240 | |||||||
Equipment | 221,900 | (46,200 | ) | 175,700 | ||||||||
Patent | 155,000 | (62,000 | ) | 93,000 | ||||||||
Solich purchased all the assets at the beginning of 2019 (3 years ago). The building is depreciated over a 10-year service life using the double-declining-balance method and estimating no residual value. The equipment is depreciated over a 9-year useful life using the straight-line method with an estimated residual value of $14,000. The patent is estimated to have a five-year service life with no residual value and is amortized using the straight-line method. Depreciation and amortization have been recorded for 2019 and 2020.
Problem 7-7A Part 1
Required:
1. For the year ended December 31, 2021, record depreciation expense for buildings and equipment. Land is not depreciated. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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