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On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The...

On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $960,000 to the various types of assets along with estimated useful lives and residual values are as follows:

Asset Cost Estimated Residual Value Estimated Useful
Life (in years)
Land $ 120,000 N/A N/A
Building 460,000 none 25
Equipment 260,000 10% of cost 6
Vehicles 120,000 $ 15,000 10
Total $ 960,000


On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $96,000 was sold for $76,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service.

Required:

1. Compute depreciation expense on the building, equipment, and vehicles for 2021.
2. Prepare the journal entries to record the depreciation on the equipment sold on June 29, 2022, and the sale of equipment.
3. Compute depreciation expense on the building, remaining equipment, and vehicles for 2022.

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ReportAnswer #1

- Annwer al. Depreciation Expense on Brilling timest oot vehicle Bulling $460000 25 years x 9 $ 18800 for 9 months - EquipmenY. qih Alc Accumulated Depreciation Alc_ To Equipment Als (Being Equipment rold) DX 76000 18000 96000 (3 Deprecation Expense

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