Compute the revised annual depreciation on each asset

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Reference no: EM131989377

Problem

Terry Wade, the new controller of Hellickson Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2015. His findings are as follows.

			Accumulated Depreciation	Useful Life in Years		Salvage Value
Type of Asset	Date Acquired	Cost	1/1/2015	Old	Proposed	Old	Proposed
Building	1/1/2009	$800,000	$114,000	40	50	$40,000	$26,000
Warehouse	1/1/2010	100,000	19,000	25	20	5,000	6,000

All assets are depreciated by the straight-line method. Hellickson Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Terry's proposed changes.

A. Compute the revised annual depreciation on each asset in 2015.
B. Prepare the entry (or entries) to record depreciation on the building in 2015.

Reference no: EM131989377

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