Colquhoun International purchases a warehouse for $321,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. A. Calculate annual depreciation expense for the first four years. B. Determine the depreciation expense for the final fifteen years of the asset’s life. When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount. C. Prepare the journal entry for year five. If an amount box does not require an entry, leave it blank. Depreciation Expense fill in the blank 0aebd6fb4003f89_2 fill in the blank 0aebd6fb4003f89_3 Accumulated Depreciation-Warehouse fill in the blank 0aebd6fb4003f89_5 fill in the blank 0aebd6fb4003f89_6
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Colquhoun International purchases a warehouse for $321,000. The best estimate of the salvage value at the time of purchase was $16,000, and it is expected to be used for twenty-five years. Colquhoun uses the
A. Calculate annual depreciation expense for the first four years.
B. Determine the depreciation expense for the final fifteen years of the asset’s life.
When revising deprecation schedules, the book value is used as the adjusting base to apply the new changes to when determine the revised yearly depreciation amount.
C. Prepare the
| Depreciation Expense | fill in the blank 0aebd6fb4003f89_2 | fill in the blank 0aebd6fb4003f89_3 | |
| fill in the blank 0aebd6fb4003f89_5 | fill in the blank 0aebd6fb4003f89_6 |
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