Accounting changes-depreciation

Assignment Help Accounting Basics

Reference no: EM13762229

(Accounting Changes-Depreciation) Hearts Inc. acquired the following assets in January 2012.

Equipment, estimated service life, 5 years; no salvage value $650,000
Building, estimated service life, 40 years; salvage value, $500,000 $5,500,000

The equipment has been depreciated using the double-declining balance method for the first 2 years for financial reporting purposes. In 2014, the company decided to change the method of computing depreciation to the straight-line method for the equipment, but no change was made in the estimated serviceblife or salvage value. It was also decided to change the total estimated service life of the building from 40 years to 35 years, with no change in the estimated salvage value. The building is depreciated on the straight-line method.

Instructions

(a) Prepare the general journal entry to record depreciation expense for the equipment in 2014.

(b) Prepare the journal entry to record depreciation expense for the building in 2014.

Reference no: EM13762229

Questions Cloud

Recognize compensation expense on books : The service period is for 3 years, beginning January 1, 2010. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense on its books in the amount of

Developing ipv6 : What is the primary reason for developing IPv6

Problems based on thermodynamics : The equation you have used to calculate the latent heat of fusion of ice.

Networking media : What are the most important components to evaluate when you look for a new computer? Defend your choice.

Accounting changes-depreciation : Hearts Inc. acquired the following assets in January 2012.

Describe each critical approach in detail : Describe each critical approach in detail. Compare and/or contrast the two critical approaches. How are they different and similar?

Draw a graph illustrating the competitive markets : A competitive labor market would hire workers at a wage of and draw a graph illustrating the competitive markets hiring decision (two side-by-side graphs)

The water in the plumbing in a house : The water in the plumbing in a house is at a gauge pressure of 230,000 Pa. What force does this cause on the top of the tank inside a water heater if the area of the top is 0.9 m2? (Ignore atmospheric pressure.)

Describe the credentialing issues in given case study : Describe the credentialing issues in Hospital's Duty to Ensure Competency case. Discuss what steps a hospital should take to help ensure that a physician is competent to perform the procedures he or she is requesting.

User Account

All Pages