Steve White the new controller of Weinberg Company, has reviewed the expected useful lives and salvage values
Question:
All assets are depreciated by the straight-line method. Weinberg Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Steve's proposed changes.
Instructions
(a) Compute the revised annual depreciation on each asset in 2011. (Show computations.)
(b) Prepare the entry (or entries) to record depreciation on the building in2010.
Accumulated Useful Life Type of Date Depreciation in Years Salvage Value Old Proposed Old Proposed Building 1/1/05 $1,200,000 $171,000 40 0 $60,000 $39,000 7,000 6,000 Asset AcquiredCost Warehouse 1/106 160,000 40,000 25 20
Step by Step Answer:
a Type of Asset Building Warehouse Book value 1111 1029000 ...View the full answer
Accounting Principles
ISBN: 9781118566671
11th Edition
Authors: Jerry Weygandt, Paul Kimmel, Donald 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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