Compute depreciation expense on the equipment

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Reference no: EM132807818

On January 1, 2011, McElroy Company 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 has been depreciated under the double-declining-balance method through 2014. In 2015, 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.

Problem a) Prepare the journal entry(ies) necessary to record the depreciation expense on the building in 2015.

Problem b) Compute depreciation expense on the equipment for 2015.

Reference no: EM132807818

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