Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $5,000
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Question:
Annual depreciation expense on a building purchased a few years ago (using the straight-line method) is $5,000 The cost of the building was $100,000 The current book value of the equipment (January 1, 2021) is $85,000 At the time of purchase, the asset was estimated to have a zero salvage value On January 1, 2021, the company decided to reduce the original useful life by 25 and to establish a salvage value of $5,000 .
The firm also decided double declining balance depreciation was more appropriate Ignore tax effects
Required
1 Prepare the journal entry, if any, to report the accounting change under GAAP .
2 Record the annual depreciation for 2021.
Related Book For
Managerial Economics and Strategy
ISBN: 978-0321566447
1st edition
Authors: Jeffrey M. Perloff, James A. Brander
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