Jack Reese, the new controller of Muckenthaler Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2010. Here are his findings:
a
|
Useful Life |
Salvage Value |
||||||
|
Type of |
Date |
Cost |
Accumulated |
Old |
Proposed |
Old |
Proposed |
|
Building |
Jan. 1, 2002 |
$900,000 |
$172,000 |
40 |
50 |
$40,000 |
$35,000 |
|
Warehouse |
Jan. 1, 2005 |
120,000 |
23,000 |
25 |
20 |
5,000 |
3,600 |
All assets are depreciated by the straight line method. Muckenthaler Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Jack proposed changes. (The Proposed useful life is total life, not remaining life.)
Instructions
(a) Compute the revised annual depreciation on each asset in 2010. (Show computations.)
(b) Prepare the entry (or entries) to record depreciation on the building in 2010.