estimated residual value of $8,000 and an estimated service life of
10 years. Bailand purchased the building 4 years ago and has used
straight-line depreciation. At the beginning of the fifth year
(before it records depreciation expense for the year), the
following independent situations occur: 1. Bailand estimates that
the asset has 8 years’ life remaining (for a total of 12
years).
2. Bailand changes to the sum-of-the-years’-digits method.
3. Bailand discovers that the estimated residual value has been
ignored in the computation of depreciation expense.
Required: For each of the independent situations, prepare
all the journal entries relating to the building for the fifth
year. Ignore income taxes.
Bailand estimates that the asset has 8 years’ life remaining
(for a total of 12 years). Prepare the journal entry on December 31
to record depreciation in the fifth year after the change in
estimate. Ignore income taxes. Additional Instruction
- Bailand Company Purchased A Building For 218 000 That Had An Estimated Residual Value Of 8 000 And An Estimated Servic 1 (16.67 KiB) Viewed 72 times
- Bailand Company Purchased A Building For 218 000 That Had An Estimated Residual Value Of 8 000 And An Estimated Servic 2 (15.46 KiB) Viewed 72 times
- Bailand Company Purchased A Building For 218 000 That Had An Estimated Residual Value Of 8 000 And An Estimated Servic 3 (22.68 KiB) Viewed 72 times
PAGE 16 GENERAL JOURNAL Score: 16/25 DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 Dec 31 Depreciation Expense 2 Accumulated Depreciation Points: 3.2/5
PAGE 16 GENERAL JOURNAL Score: 33/51 DATE POST. REF. DEBIT CREDIT 1 2 ACCOUNT TITLE Dec 31 Accumulated Depreciation Retained Earnings Dec 31 Depreciation Expense Accumulated Depreciation 3 Points: 6.47 / 10