The following transactions and adjusting entries were completed by a paper-packaging company called Gravure Graphics International during 2018 and 2019. The company uses straight-line depreciation for trucks and other vehicles, double-declining-balance depreciation for buildings, and straight-line amortization for patents.
January 2, 2015 Paid $86,000 cash to purchase storage shed components.
January 3, 2015 Paid $2,000 cash to have the storage shed erected. The storage
shed has an estimated life of 10 years and a residual value of
$5,000.
April 1, 2015 Paid $40,000 cash to purchase a pickup truck for use in the business.
The truck has an estimated useful life of five years and a residual
value of $3,000.
May 13, 2015 Paid $500 cash for repairs to the pickup truck.
July 1, 2015 Paid $29,000 cash to purchase patent rights on a new paper bag
manufacturing process. The patent is estimated to have a remaining
useful life of five years.
December 31, 2015 Recorded depreciation and amortization on the pickup truck,
storage shed, and patent.
June 30, 2016 Sold the pickup truck for $34,000 cash. (Record the depreciation
on the truck prior to recording its disposal.)
December 31, 2016 Recorded depreciation on the storage shed. Determined that
the patent was impaired and wrote off its remaining book value
(i.e., wrote down the book value to zero).
Record the journal entries for the following:
1. Record the purchase of storage shed components for $86,000.
2. Record the payment of $2,000 to have the storage shed erected
3. Record the purchase of a pickup truck for $40,000.
4. Record the repairs of $500 to the pickup truck.
5. Record the purchase of a patent for $29,000 on a new paper bag manufacturing process
6. Record the depreciation and amortization expense on the pickup truck, storage shed and patent for the year
7. Record the depreciation for the truck up to the date of sale.
8. Record the sale of the pickup truck for $34,000 cash.
9. Record the depreciation on the storage shed for the year.
10. Record any impairment loss incurred on the patent.

Note: See Sheet1 of the attached excel file for the journal entries for recording events 1 to 10 as well as the formulae in front of the ones that required calculations.

Note that the double-declining-balance depreciation for buildings is calculated for December 31, 2015 and December 31, 2016 as follows:

As form of definition, double-declining-balance is a depreciation method under which an asset is depreciated at twice the rate of the straight line depreciation method.

The depreciation rate for the building is therefore obtained as follows:

Straight line depreciation rate = 1 / Number of estimated life = 1 / 10 = 0.10, or 20%

Double-declining depreciation rate = Straight line depreciation rate * 2 = 10% * 2 = 20%

Total cost of building = $86,000 + $2,000 = $88,000

Depreciation expense on building on December 31, 2015 = Total cost of building * Double-declining depreciation rate = $88,000 * 20% = $17,600

Beginning value of Building on on January 1, 2016 = Total cost of building - Depreciation expense on building on December 31, 2015 = $88,000 - $17,600 = $70,400

Depreciation expense on building on December 31, 2016 = Beginning value of Building on on January 1, 2016 * Double-declining depreciation rate = $70,400 * 20% = $14,080

Additional Note:

See Sheet2 of the attached excel file for how the calculation of Building Depreciation Expenses Using Double-declining balance for the whole of estimated life of 10 years is done. Note that the $5,000 End year book value in Year 10 is the Salvage value and the Year 10 Accumulated depreciation is $83,000 which is the depreciable part of the $88,000.

Lastly, the Year 10 depreciation expense is calculated as follows:

Year 10 depreciation expense = Year 10 Beginning depeciable amount - Salvage value = $11,811 - $5,000 = $6,811