P11-6 Depreciation methods: partial-year depreciation, sale of assets;On March 31, 2011, the Herzog Company purchased a factory complete with machinery and equipment. The allocation of the total purchase price of $1,000,000 to the various types of assets along with estimated useful lives and residual values are as follows;Assets;Cost;Estimated Residual Value;Estimated Useful Life in Years;Land;100,000;N/A;N/A;building;500,000;none;25;Machinery;240,000;10% of cost;8;Equipment;160,000;13,000;6;Total;1,000,000;On June 28, 2012, machinery included in the March 31, 2011, purchase that cos $100,000 was sold for $80,000. Herzog uses the straight-line depreciation method for buildings and machinery and the sum-of-the-years?-digits method for equipment. Partial-year depreciation is calculated based on the number of months an asset is in service.;Required;1. Compare depreciation expense on the building, machinery, and equipment for 2011.;2. Prepare journal entries to record (1) depreciation on the machinery sold on June 29, 2012, and (2) the sale of machinery.;3. Compute depreciation expense on the building, remaining machinery, and equipment for 2012.
Paper#81329 | Written in 18-Jul-2015Price : $22