Compute depreciation expense on the equipment

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Question - On January 1, 2013, Powell Company purchased a building and equipment that have the following useful lives, salvage value, and costs.

Building, 25-year estimated useful life, $4,000,000 cost, $400,000 salvage value

Equipment, 15-year estimated useful life, $600,000 cost, no salvage value

The building has been depreciated under the straight-line method through 2017. In 2018, Powell decided to change the total useful life of

the building to 30 years. The equipment is depreciated using the straight-line method, but in 2018, the company decided to switch to the double-declining balance method of depreciation for the equipment and changed the salvage value to $60,000.

Instructions

(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2018.

(b) Compute depreciation expense on the equipment for 2018.

Reference no: EM132280360

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