Question

Victor Mineli, the new controller of Ivanhoe Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings:

Type of Asset		Date Acquired		Cost		Accumulated Depreciation, Jan. 1, 2017		Useful Life (in years)				Salvage Value
								Old		Proposed		Old		Proposed
Building		Jan. 1, 2009		$857,000		$159,100		40		48		$61,500		$35,600
Warehouse		Jan. 1, 2012		129,500		24,960		25		20		4,700		5,300

All assets are depreciated by the straight-line method. Ivanhoe Company 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.)

Compute the revised annual depreciation on each asset in 2017. (Round answers to 0 decimal places, e.g. 125.)

		Building		Warehouse
Revised annual depreciation		$enter a dollar amount $16,558		$enter a dollar amount $6,616

Question :

Prepare the entry to record depreciation on the building in 2017. (Round answers to 0 decimal places, e.g. 125. 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.)

Answer 1