Terry Wade, the new controller of Hellickson Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. His findings are as follows.

Useful Life Accumulated in Years Salvage Value Туре of Asset Acquired Building Warehouse Date Depreciation Cost Old Proposed 1/1/17 Old Proposed 1/1/11 $800,000 $114,000 40 50 $40,000 $26,000 1/1/12 100,000 19,000 25 20 5,000 6,000

All assets are depreciated by the straight-line method. Hellickson Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Terry’s proposed changes.

Instructions

(a) Compute the revised annual depreciation on each asset in 2017. (Show computations.)

(b) Prepare the entry (or entries) to record depreciation on the building in 2017.

Expert Solution

Part a.

Revised annual depreciation on each asset in 2017:

Building = (800000-114000-26000)/44 = $15000 per year

Warehouse = (100000-19000-6000)/15 = $5000 per year

Part b.

Journal entry to record depreciation on the building in 2017:

Date	account and explanation:	debit	credit
	Depreciation expense	15000
	Accumlated depreciation-Building		15000
	(TO record depreciation )

Junaid answered 2 years ago

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Question

Terry Wade, the new controller of Hellickson Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. His findings are as follows.

Solutions

Expert Solution

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