Question

Question 7 of 9 -/14 View Policies Current Attempt in Progress Victor Mineli, the new controller of Pharoah Company, 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 Building Warehouse Cost Date Acquired Jan. 1, 2014 Jan. 1, 2017 Accumulated Depreciation, Jan. 1, 2022 $147.300 22,440 Useful Life (in years) Old Proposed 40 58 Salvage Value Old Proposed $64.000 $35,800 4.800 4,560 $800,500 117,000 25 20 All assets are depreciated by the straight-line method. Pharoah Company 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.) Building Warehouse search (994

Answer 1

(a)
Particulars	Building	Warehouse
Cost	$ 800,500	$ 117,000
Less: Accumulated Depreciation - Jan 1, 2022	($ 147,300 )	($ 22,440)
Book Value as on Jan.1 2022	$ 653,200	$ 94,560
Less: Proposed Salvage Value	($ 35,800)	($ 4,560)
(A)	$ 617,400	$ 90,000
Proposed Useful life (B)	50 (58 (-) 8 years )	15 years (20 (-) 5 Year )
Revised annual depreciation (A /B )	$ 12,348	$ 6,000
(b)
Account titles and Explanation	Debit	Credit
Depreciation Expense	$ 12,348
Accumulated Depreciation - Buildings		$ 12,348
(To record the Depreciation Expense )