Sage purchased equipment on January 2, 2017, for $78,900. At that time, the equipment had an estimated useful life of 10 years with a $4,900 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,800 salvage value. During 2020, Sage changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a salvage value of $30,000. The following computations present depreciation on both bases for 2018 and 2019. 2019 2018 $27,000 60,000 $27,000 aight-line dining-balance 48,000 Sage purchased a machine on July 1, 2018, at a cost of $140,000. The machine has a salvage value of $14,000 and a useful life of 8 years. Sage's bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the salvage value. are the journal entries to record depreciation expense for 2020 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are (r entered Oo not (ndent manually, If no entry Is reguired, select "No Entry" for the account titles and enter 0 for the amounts.)
Sage purchased equipment on January 2, 2017, for $78,900. At that time, the equipment had an estimated useful life of 10 years with a $4,900 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2020, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $2,800 salvage value. During 2020, Sage changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $300,000. It had a useful life of 10 years and a salvage value of $30,000. The following computations present depreciation on both bases for 2018 and 2019. 2019 2018 $27,000 60,000 $27,000 aight-line dining-balance 48,000 Sage purchased a machine on July 1, 2018, at a cost of $140,000. The machine has a salvage value of $14,000 and a useful life of 8 years. Sage's bookkeeper recorded straight-line depreciation in 2018 and 2019 but failed to consider the salvage value. are the journal entries to record depreciation expense for 2020 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are (r entered Oo not (ndent manually, If no entry Is reguired, select "No Entry" for the account titles and enter 0 for the amounts.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...
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