Terry Wade, the new controller of Hellickson Company, has reviewed the expected
ID: 2451951 • Letter: T
Question
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.
Date
Accumulated
Depreciation
Useful life
in Years
Salvage Value
Type of Asset
Acquired
Cost
1/1/15
Old
Proposed
Old
Proposed
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.
1.)Compute the revised annual depreciation on each asset in 2015. ( Building and Warehouse)
2.)Prepare the entry to record depreciation on the building in 2015. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Date
Accumulated
Depreciation
Useful life
in Years
Salvage Value
Type of Asset
Acquired
Cost
1/1/15
Old
Proposed
Old
Proposed
Building 1/1/09 $806,700 $115,410 40 50 $37,300 $50,210 Warehouse 1/1/10 114,000 21,940 25 20 4,300 19,610Explanation / Answer
1.)Compute the revised annual depreciation on each asset in 2015.
Building = (806700-115410-50210)/44 = $14570
Warehouse = (114000-21940-19610)/15 = $4830
2) Journal entry :
Date accounts & explanation debit credit Depreciation expense 14570 Accumlated depreciation-Building 14570 (To record depreciation expense)Related Questions
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