On January 1, 2010, Apartments Plus Company purchased an apartment building and related equipment that have the
Question:
On January 1, 2010, Apartments Plus Company purchased an apartment building and related equipment that have the following useful lives, salvage values, and costs.
Building, 25-year estimated useful life, $300,000 salvage value, $2,500,000 cost
Equipment, 10-year estimated useful life, no salvage value, $300,000 cost
The building has been depreciated under the straight-line method through 2014. In 2015, the company decided to switch to the double-declining-balance method of depreciation for the building. Apartments Plus also decided to change the total useful life of the equipment to 12 years, with a salvage value of $10,000 at the end of that time. The equipment is depreciated using the straight-line method.
Instructions
Prepare the journal entry(ies) necessary to record the depreciation expense on the building and equipment in 2015.
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...
Step by Step Answer:
Computation of 2015 depreciation expense on the building Cos...View the full answer
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
