The Snack Stop had the following long-term asset balances as of January 1, 2021:?CostAccumulated DepreciationBook ValueLand$90,000- $90,000Building600,000($60,000)540,000Equipment200,000(72,000)128,000Patent80,000(20,000)60,000All of the assets were purchased at the beginning of 2020. The building is depreciated over a 20-year service life using the straight-line method and estimating no residual value. The equipment is depreciated over a 10-year useful life using the double-declining-balance method with an estimated residual value of $10,000. The patent is estimated to have an eight-year service life with no residual value and is amortized using the straight-line method. Depreciation and amortization have already been calculated for the first two years. Required: 1. For the year
ended December 31, 2022, record depreciation expense for buildings and equipment. Land is not depreciated.2. For the year ended December 31, 2022, record amortization expense for the patent.3. Calculate the book value for each of the four long-term assets at December 31, 2022.
What will be an ideal response?
Requirement 1
| ? | Debit | Credit |
| Depreciation Expense ($600,000/20) | 30,000 | ? |
| Accumulated Depreciation | ? | 30,000 |
| ? | Debit | Credit |
| Depreciation Expense ($128,000 × 2/10) | 25,600 | ? |
| Accumulated Depreciation | ? | 25,600 |
Requirement 2
| ? | Debit | Credit |
| Amortization Expense ($80,000/8) | 10,000 | ? |
| Patent | ? | 10,000 |
Requirement 3
| The Snack Stop |
| December 31, 2022 |
| ? | Cost | Accumulated Depreciation | Book Value |
| Land | $90,000 | - | $90,000 |
| Building | 600,000 | ($90,000) | 510,000 |
| Equipment | 200,000 | (97,600) | 102,400 |
| Patent | 80,000 | (30,000) | 50,000 |
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