Question

Victor Mineli, the new controller of Sandhill Co., has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Type of Asset Date Acquired Cost Accumulated Depreciation, Jan. 1, 2022 Useful Life (in years) Salvage Value Old Proposed Old Proposed Building Jan. 1, 2014 $908,000 $168,500 40 58 $65,500 $36,600 Warehouse Jan. 1, 2017 153,000 29,680 25 20 4,600 5,420 All assets are depreciated by the straight-line method. Sandhill Co. uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor’s proposed changes. (The “Proposed” useful life is total life, not remaining life.)

Compute the revised annual depreciation on each asset in 2022. (Round answers to 0 decimal places, e.g. 125.)

Prepare the entry to record depreciation on the building in 2022. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer: a) particulars Building ware house original cost of asset the asset $908,000 153,000 Les: Accumulated Depreciation l$ 168,500 29.680 Net Book value as on 1st Jan 2022 $ 739,500 123,320 Lest: Revised salvage value $36,600 5420 Depreciation Cost A) $702,900 1117,900 Revised remaining useful life in years (6) 50 15 168-8) (20-5) Revised annual depreciation (A/B) $ 14058 7860 6) Journal Entry's pate particulary Debit credit Dec 31 Depreciation Expense Alc dr $14058 2022 TO Accumulated Deprecialion- $14058 Building Being to recold depreciation)