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 2014. His findings are as follows.
| Date | Accumulated Depreciation |
Useful life in Years |
Salvage Value | |||||||||||
| Type of Asset | Acquired | Cost | 1/1/14 | Old | Proposed | Old | Proposed | |||||||
| Building | 1/1/08 | $800,000 | $114,000 | 40 | 50 | $40,000 | $26,000 | |||||||
| Warehouse | 1/1/09 | 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.