Carla Cole Inc. acquired the following assets in January of 2015. Equipment, estimated service life, 5...

60.1K

Verified Solution

Question

Accounting

Carla Cole Inc. acquired the following assets in January of2015. Equipment, estimated service life, 5 years; salvage value,$16,000 $559,000 Building, estimated service life, 30 years; nosalvage value $675,000 The equipment has been depreciated using thesum-of-the-years’-digits method for the first 3 years for financialreporting purposes. In 2018, the company decided to change themethod of computing depreciation to the straight-line method forthe equipment, but no change was made in the estimated service lifeor salvage value. It was also decided to change the total estimatedservice life of the building from 30 years to 40 years, with nochange in the estimated salvage value. The building is depreciatedon the straight-line method.
(a) Prepare the general journal entry to record depreciationexpense for the equipment in 2018.
(b) Prepare the journal entry to record depreciation expense forthe building in 2018.

Answer & Explanation Solved by verified expert

4.0 Ratings (801 Votes)

Equipment Cost 559000 Estimated service life 5 years Salvage value 16000 Depreciation under the sum of the years digits method cost salvage value number of years left nn12 nn12 5512 15 Depreciation in the year 2015 559000 16000 5 15 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member