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Victor Mineli, the new controller of Blossom Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings:Type ofAsset DateAcquired Cost AccumulatedDepreciation,Jan. 1, 2017 Useful Life(in years) Old Useful Life(in years) Proposed Salvage ValueOld Salvage ValueProposedBuilding Jan. 1, 2009 $700,000 $129,900 40 48 $50,500 $35,100Warehouse Jan. 1, 2012 115,000 22,100 25 20 4,500 3,000All assets are depreciated by the straight-line method. Blossom 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.)(a) Compute the revised annual depreciation on each asset in 2017. (Round answers to 0 decimal places, e.g. 125.)Building WarehouseRevised annual depreciation $ _____ $ _____

Sagot :

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a. Based on the information given the revised depreciation is:

Building     $1,250

Warehouse $5,993

b. Debit Depreciation expense $13,375

Credit Accumulated depreciation-Building  $13,375

a. Victor Mineli Revised depreciation

Revised depreciation for Building

Building= ($700,000-$129,900-$35,100)/40

Building= $535,000/40

Building=$13,375

Revised depreciation for Warehouse

Warehouse=($115,000-$22,100-$3,000)/15

Warehouse =$89,900/15

Warehouse=$5,993

b. Journal entry

Debit Depreciation expense $13,375

Credit Accumulated depreciation-Building  $13,375

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