Homework Answers
Depreciation for building
Given,
Cost of Building = $750,400
Salvage Value = $48,400
Useful life = 40 years
Depreciation rate = 1/ Useful life = 1/40 * 100 = 2.5%
Since double declining method is used, depreciation rate would be = 2 * 2.5% = 5%
Depreciation for the period starting January 1 2014 till December 31 2017
| Year | Book Value (Beginning of the year) | Depreciation | Book Value (End of the year) |
| 2014 | 750400 | 37520 | 712880 |
| 2015 | 712880 | 35644 | 677236 |
| 2016 | 677236 | 33861.8 | 643374.2 |
| 2017 | 643374.2 | 32168.71 | 611205.49 |
Therefore Book Value of the building as at Dec 31 2017 = $611,205.49 and the remaining useful life = 36 years
From 2018 onward, the company is planning to use straight line method for depreciating the building.
Therefore Depreciation = 
= 
= $15633.49
Therefore the Journal entry would be
| Particulars | Debit | Credit |
| Depreciation Expense | $15,633 | |
| Accumulated Depreciation - Building | $15,633 |
Depreciation for equipment
Given,
Cost of Equipment = $97,300
Salvage Value = $10,000
Useful life = 12 years
Depreciation amount for each year under straight line method of
depreciation = 
= $7275
| Year | Depreciation amount | Book Value |
|
2014 |
7275 | 90025 |
| 2015 | 7275 | 82750 |
| 2016 | 7275 | 75475 |
| 2017 | 7275 | 68200 |
Therefore Book Value of the equipment as at Dec 31 2017 = $68,200 and the remaining useful life = 8 years
From 2018 onward, the company is planning to change the total useful life to 9 years and salvage value to $4400
Therefore new remaining useful life after Dec 31 2017 = 5 years
Depreciation for 2018 = 
= $12,760
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