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 |
Date |
Cost |
Accumulated |
Useful Life (in years) |
Salvage Value |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Old |
Proposed |
Old |
Proposed |
|||||||||||
Building |
Jan. 1, 2014 | $728,500 | $134,200 | 40 | 58 | $57,500 | $36,100 | |||||||
Warehouse |
Jan. 1, 2017 | 161,500 | 31,200 | 25 | 20 | 5,500 | 5,800 |
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.)
Incorrect answer iconYour answer is incorrect.
Compute the revised annual depreciation on each asset in 2022. (Round answers to 0 decimal places, e.g. 125.)
Building |
Warehouse |
|||
---|---|---|---|---|
Revised annual depreciation |
$enter a dollar amount |
$enter a dollar amount |
eTextbook and Media
List of Accounts
Partially correct answer iconYour answer is partially correct.
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.)
Account Titles and Explanation |
Debit |
Credit |
---|---|---|
enter an account title |
enter a debit amount |
enter a credit amount |
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
1 | ||
Building | Warehouse | |
Cost | 728500 | 161500 |
Less: Accumulated Depreciation | 134200 | 31200 |
Book value | 594300 | 130300 |
Less: Revised Salvage value | 36100 | 5800 |
Depreciable cost | 558200 | 124500 |
Less: Remaining useful life | 50 | 15 |
Revised Annual Depreciation | 11164 | 8300 |
2 | ||
Debit | Credit | |
Depreciation expense | 11164 | |
Accumulated Depreciation-Building | 11164 |
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