On January 1, 2016, Crane Corporation purchased a building to use as its factory, and some equipment
Question:
On January 1, 2016, Crane Corporation purchased a building to use as its factory, and some equipment to manufacture its product. The following information was determined at the time of purchase:
Cost | Useful Life | Residual Value | Depreciation | |||||
Building | $2,320,000 | 20 years | $464,000 | Double Declining | ||||
Equipment | $1,060,000 | 25 years | $106,000 | Straight Line |
On January 1, 2019, Crane decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building.
Crane also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $50,000. The depreciation method for the equipment did not change. Prepare the journal entries to record depreciation for both assets for 2019.
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith