On January 1, 2018, McElroy plc purchased a building and equipment that have the following useful lives,
Question:
On January 1, 2018, McElroy plc purchased a building and equipment that have the following useful lives, residual values, and costs. Building, 40-year estimated useful life, £50,000 residual value, £1,200,000 cost Equipment, 12-year estimated useful life, £10,000 residual value, £130,000 cost The building was depreciated under the double-declining-balance method through 2021. In 2022, the company decided to switch to the straight-line method of depreciation. McElroy also decided to change the total useful life of the equipment to 9 years, with a residual value of £5,000 at the end of that time. The equipment is depreciated using the straight-line method.
Instructions
a. Prepare the journal entry or entries necessary to record the depreciation expense on the building in 2022.
b. Compute depreciation expense on the equipment for 2022.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield