Compute depreciation, amortization, and book value of long-term assets (LO7–4, 7–5)
Solich Sandwich Shop had the following long-term asset balances as of December 31, 2018:
Cost | Book Value | ||
Land | $ 95,000 | – | $ 95,000 |
Building | 460,000 | $(165,600) | 294,400 |
Equipment | 235,000 | (50,000) | 185,000 |
Patent | 250,000 | (100,000) | 150,000 |
Solich purchased all the assets at the beginning of 2016 (3 wars ago). The building is
Required:
1. For the war ended December 31, 2018, record depreciation expense for buildings and equipment. Land is not depreciated
2. For the war ended December 31, 2018, record amortization expense for the patent.
3. Calculate the book value for each of the four long-term assets at December 31, 2018.
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