Terry Wade, the new controller of Sheridan Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2020. His findings are as follows.  Date   AccumulatedDepreciation Useful lifein Years Salvage ValueType of Asset Acquired Cost 1/1/20 Old Proposed Old ProposedBuilding 1/1/14 $810,000 $114,900 40 50 $44,000 $43,900Warehouse 1/1/15 110,000 21,180 25 20 4,100 13,820Compute the revised annual depreciation on each asset in 2020.  Building WarehouseRevised annual depreciation $enter a dollar amount  $enter a dollar amount Prepare the entry to record depreciation on the building in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCreditDec. 31enter an account title for the journal entry on December 31enter a debit amountenter a credit amount enter an account title for the journal entry on December 31enter a debit amountenter a credit amount

Question
Asked Nov 4, 2019

Terry Wade, the new controller of Sheridan Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2020. His findings are as follows.

   
Date
     
Accumulated
Depreciation
 
Useful life
in Years
 
Salvage Value
Type of Asset
 
Acquired
 
Cost
 
1/1/20
 
Old
 
Proposed
 
Old
 
Proposed
Building
 
1/1/14
  $810,000   $114,900   40   50   $44,000   $43,900
Warehouse
 
1/1/15
  110,000   21,180   25   20   4,100   13,820

Compute the revised annual depreciation on each asset in 2020.

   
Building
 
Warehouse
Revised annual depreciation
  $enter a dollar amount    $enter a dollar amount 

Prepare the entry to record depreciation on the building in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date
Account Titles and Explanation
Debit
Credit
Dec. 31
enter an account title for the journal entry on December 31
enter a debit amount
enter a credit amount
 
enter an account title for the journal entry on December 31
enter a debit amount
enter a credit amount
check_circleExpert Solution
Step 1

Determine the revised annual depreci...

Cost of building
Less: Accumulated depreciation till 1 Jan 2020
Book value as on 1 Jan 2020
Less: Proposed Salvage value
Depreciable cost
Divide: Life of asset left (50-6)
Revised annual depreciation on Building in 2020
$810,000
$114,900
$695,100
$43,900
$651,200
44
$14.800
Cost of warehouse
Less: Accumulated depreciation till 1 Jan 2020
Book value as on 1 Jan 2020
Less: Proposed Satvage value
Depreciable cost
Divide: Life of asset left (20-5)
Revised annual depreciation on Warehouse in 2020
$110,000
S21,180
$88,820
$13,820
$75,000
15
$5,000
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Cost of building Less: Accumulated depreciation till 1 Jan 2020 Book value as on 1 Jan 2020 Less: Proposed Salvage value Depreciable cost Divide: Life of asset left (50-6) Revised annual depreciation on Building in 2020 $810,000 $114,900 $695,100 $43,900 $651,200 44 $14.800 Cost of warehouse Less: Accumulated depreciation till 1 Jan 2020 Book value as on 1 Jan 2020 Less: Proposed Satvage value Depreciable cost Divide: Life of asset left (20-5) Revised annual depreciation on Warehouse in 2020 $110,000 S21,180 $88,820 $13,820 $75,000 15 $5,000

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