Sheffield Company is in the process of preparing its financial statements for 2020. Assume that no entries for depreciation have been recorded in 2020. The following information related to depreciation of fixed assets is provided to you. 1. Sheffield purchased equipment on January 2, 2017, for $89.100. At that time, the equipment had an estimated useful life of 10 years with a $5,100 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020. as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,800 salvage value. During 2020. Sheffield changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $310.000. It had a useful life of 10 years and a salvage value of $31,000. The following computations present depreciation on both bases for 2018 and 2019. 2. 2019 2018 $27.900 $27.900 Straight-line Declining-balance 49,600 62.000 3. Sheffield purchased a machine on July 1, 2018, at a cost of $120,000. The machine has a salvage value of $20,000 and a useful life of 8 years. Sheffield's bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the salvage value. le Your Answer Correct Answer Your answer is partially correct. Prepare the journal entries to record depreciation expense for 2020 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1. Depreciation Expense 15275 Accumulated Depreciation Equipment 15275 2. Depreciation Expense 20925 Accumulated Depreciation-Buildings 20925 3. Depreciation Expense 12500 QUE Accumulated Depreciation Machinery 12500 (To record current year depreciation.) Depreciation Expense 3750 Retained Earings 3750 (To correct prior year depreciation.) eTextbook and Media Solution List of Accounts Attempts: 3 of 3 used (b) X Your answer is incorrect. Show comparative net income for 2019 and 2020. Income before depreciation expense was $310.000 in 2020, and was $320,000 in 2019. (Ignore taxes.) SHEFFIELD COMPANY Comparative Income Statements For the Years 2020 and 2019 2020 2019 Income before depreciation expense S 320000 $ 310000 Depreciation expense 50366 72166 Net income $ 269634 09 237834 eTextbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit
