(solution) . Calculate and prepare the journal entry for the amortization

(solution) . Calculate and prepare the journal entry for the amortization

. Calculate and prepare the journal entry for the amortization expense incurred on the

building, deep fryer, and toaster in 2013.

Building

2,500,000 – 500,000 = 2,000,000 / 20 years = 100,000

DR. Amortization expense 100,000

CR. Accumulated amortization 100,000

Deep Fryer

100,000 (NBV) x (2 / 5) = 40,000

DR. Amortization expense 40,000

CR. Accumulated amortization 40,000

Toaster – The toaster toasted 5,000 pitas during the year.

(cost – residual value) / estimated total production x actual annual production

(50,000 – 10,000) / 100,000 = 0.4 / toast

0.4 / toast x 5,000 = 2,000

DR. Amortization expense 2,000

CR. Accumulated amortization 2,000

Disposal of Asset