Steve Grant, the new controller of Greenbriar Company, has reviewed the expected useful lives and salvage values
Question:
Steve Grant, the new controller of Greenbriar Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2014. His findings are as follows.
All assets are depreciated by the straight-line method. Greenbriar Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Grant's proposed changes.
Instructions
(a) Compute the revised annual depreciation on each asset in 2014. (Show computations.)
(b) Prepare the entry (or entries) to record depreciation on the building in 2014.
Accumulated Useful Life Depreciation in Years Salvage Value Type of Date Asset Acquired Cost Old Proposed Old Proposed Building /06 $800,000 $152,000 40 50 $40,000 $18,000 10,000 3,700 Warchouse /1/09 100,000 18,000 25 20
Step by Step Answer:
a Type of Asset Building Warehouse Book value 1114 Less Sal...View the full answer
Financial and managerial accounting
ISBN: 978-1118016114
1st edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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