Prepare the journal entries to record depreciation

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Question - On January 1, 2019, Swifty 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

$2,630,000

20 years

$526,000

Double Declining

Equipment

$930,000

25 years

$93,000

Straight-Line

On January 1, 2022, Swifty 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.

Swifty also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $47,000. The depreciation method for the equipment did not change. Prepare the journal entries to record depreciation for both assets for 2022.

Reference no: EM133068605

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