Exercise 9-6 Victor Mineli, the new controller of Crane Company, has reviewed th

Question

Exercise 9-6 Victor Mineli, the new controller of Crane Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings: Accumulated Depreciation, Useful Life (in years) Salvage Value Date Acquired Type of Jan. 1, 2017 Old Proposedold Proposed Asset Building Warehouse 2012 All assets are depreciated by the straight-line method. Crane Company uses a calendar year in preparing annual financial statements. After discussion, Cost $869,500 149,000 Jan. 1, 2009 Jan. 1, $162,800 40 48 $55,500 $36,900 28,750 25 20 5,250 3,400 management has agreed to accept Victor's proposed changes. (The "Proposed" useful life is total life, not remaining life.) Your answer is incorrect. Try again Compute the revised annual depreciation on each asset in 2017. (Round answers to O decimal places, e.g. 125.) Buildin arehouse Revised annual depreciation

Explanation / Answer

Calculate revised annual depreciation :

Building = (869500-162800-36900)/40 = 16745

Warehouse = (149000-28750-3400)/15 = 7790

b) Journal entry :

Date accounts & explanation debit credit Depreciation expense 16745 Accumlated depreciation-Building 16745 (To record depreciation)

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