Exercise 9-6 (Part Level Submission) Type of Date Accumulated Depreciation, Usef
ID: 2571549 • Letter: E
Question
Exercise 9-6 (Part Level Submission)
Type of
Date
Accumulated
Depreciation,
Useful Life (in years)
Salvage Value
Asset
Acquired
Cost
Jan. 1, 2017
Old
Proposed
Old
Proposed
(a)
Building
Warehouse
Exercise 9-6 (Part Level Submission)
Victor Mineli, the new controller of Sandhill Co., has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings:Type of
Date
Accumulated
Depreciation,
Useful Life (in years)
Salvage Value
Asset
Acquired
Cost
Jan. 1, 2017
Old
Proposed
Old
Proposed
Building Jan. 1, 2009 $770,000 $139,900 40 48 $70,500 $36,500 Warehouse Jan. 1, 2012 142,000 27,130 25 20 6,350 5,400All assets are depreciated by the straight-line method. Sandhill Co. 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.)
Explanation / Answer
Particulars
Building
Warehouse
Cost
$770,000
142,000
Less: Acc depreciation as on Jan. 1, 2017
$139,900
27,130
Less: Proposed salvage value
$36,500
5,400
Net depreciable value
$593,600
$109,470
proposed useful life
48 years
20 years
Remaining life from purchase
(48-8)= 40years
(20-5)= 15 years
Depreciation = (depreciable value/No of years remaining useful life (593,600/40 years)
$14,840
$7,298
Depreciation
$14,840
$7,298
Particulars
Building
Warehouse
Cost
$770,000
142,000
Less: Acc depreciation as on Jan. 1, 2017
$139,900
27,130
Less: Proposed salvage value
$36,500
5,400
Net depreciable value
$593,600
$109,470
proposed useful life
48 years
20 years
Remaining life from purchase
(48-8)= 40years
(20-5)= 15 years
Depreciation = (depreciable value/No of years remaining useful life (593,600/40 years)
$14,840
$7,298
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.