On March 31, 2018, the Herzog Company purchased a factorycomplete with machinery and equipment....

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Accounting

On March 31, 2018, the Herzog Company purchased a factorycomplete with machinery and equipment. The allocation of the totalpurchase price of $1,040,000 to the various types of assets alongwith estimated useful lives and residual values are as follows:
Asset
Cost
Estimated Residual Value
Estimated Useful
Life in Years
Land
$
120,000
N/A
N/A
Building
540,000
none
25
Machinery
200,000
10% of cost
6
Equipment
180,000
$
15,000
5
Total
$
1,040,000

On June 29, 2019, machinery included in the March 31, 2018,purchase that cost $104,000 was sold for $84,000. Herzog uses thestraight-line depreciation method for buildings and machinery andthe sum-of-the-years'-digits method for equipment. Partial-yeardepreciation is calculated based on the number of months an assetis in service.

Required:
1. Compute depreciation expense on thebuilding, machinery, and equipment for 2018.
2. Prepare the journal entries to record thedepreciation on the machinery sold on June 29, 2019, and the saleof machinery.
3. Compute depreciation expense on the building,remaining machinery, and equipment for 2019.

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In: AccountingOn March 31, 2018, the Herzog Company purchased a factorycomplete with machinery and equipment. The...On March 31, 2018, the Herzog Company purchased a factorycomplete with machinery and equipment. The allocation of the totalpurchase price of $1,040,000 to the various types of assets alongwith estimated useful lives and residual values are as follows:AssetCostEstimated Residual ValueEstimated UsefulLife in YearsLand$120,000N/AN/ABuilding540,000none25Machinery200,00010% of cost6Equipment180,000$15,0005Total$1,040,000On June 29, 2019, machinery included in the March 31, 2018,purchase that cost $104,000 was sold for $84,000. Herzog uses thestraight-line depreciation method for buildings and machinery andthe sum-of-the-years'-digits method for equipment. Partial-yeardepreciation is calculated based on the number of months an assetis in service.Required:1. Compute depreciation expense on thebuilding, machinery, and equipment for 2018.2. Prepare the journal entries to record thedepreciation on the machinery sold on June 29, 2019, and the saleof machinery.3. Compute depreciation expense on the building,remaining machinery, and equipment for 2019.

Asset	Cost		Estimated Residual Value		Estimated Useful Life in Years
Land	$	120,000		N/A	N/A
Building		540,000		none	25
Machinery		200,000		10% of cost	6
Equipment		180,000	$	15,000	5
Total	$	1,040,000