Accounting Changes Depreciation Robillard Inc. acquired the following assets in January of 2007. Equipment estimated service life,

Question:

Accounting Changes—Depreciation Robillard Inc. acquired the following assets in January of 2007.

Equipment estimated service life, 5 years; salvage value, $15,000 $465,000

Building, estimated service life, 30 years; no salvage value $780,000

The equipment has been depreciated using the sum-of-the-years’-digits method for the first 3 years for financial reporting purposes. In 2010, the company decided to change the method of computing Depreciation to the straight-line method for the equipment, but no change was made in the estimated service life or salvage value. It was also decided to change the total estimated service life of the building from 30 years to 40 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method.

(a) Prepare the journal entry to record Depreciation expense for the equipment in 2010.

(b) Prepare the journal entry to record Depreciation expense for the building in 2010. (Round to nearest dollar.)

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...