A building was purchased for $400,000 and depreciated for 10 years on a straight-line basis under the assumption it would have a 25-year life and a $20,000 salvage value. At the beginning of the building's 11th year it was recognized the building had 10 years of remaining life instead of 15 and that at the end of the remaining 10 years its salvage value would be $15,000. 1. What is the annual amount of depreciation for the first 10 years based on the original 25-year life? Cost Less: Salvage value Depreciable cost Annual depreciation --------------------------------> 2. What is the accumulated depreciation at the end of Year 10? Accumulated depreciation ------------------------> 3. What is the annual depreciation for the remaining 10 years based on the revision in life and salvage value? Cost Less: Accumulated depreciation Book value Less: Revised salvage value Depreciable cost Annual depreciation -------------------------------->
A building was purchased for $400,000 and depreciated for 10 years on a straight-line basis under the assumption it would have a 25-year life and a $20,000 salvage value. At the beginning of the building's 11th year it was recognized the building had 10 years of remaining life instead of 15 and that at the end of the remaining 10 years its salvage value would be $15,000. 1. What is the annual amount of depreciation for the first 10 years based on the original 25-year life? Cost Less: Salvage value Depreciable cost Annual depreciation --------------------------------> 2. What is the accumulated depreciation at the end of Year 10? Accumulated depreciation ------------------------> 3. What is the annual depreciation for the remaining 10 years based on the revision in life and salvage value? Cost Less: Accumulated depreciation Book value Less: Revised salvage value Depreciable cost Annual depreciation -------------------------------->
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| A building was purchased for $400,000 and depreciated for 10 years on a straight-line basis under the |
| assumption it would have a 25-year life and a $20,000 salvage value. |
| At the beginning of the building's 11th year it was recognized the building had 10 years of |
| remaining life instead of 15 and that at the end of the remaining 10 years its salvage value would be $15,000. |
| 1. What is the annual amount of depreciation for the first 10 years based on the original 25-year life? |
| Cost |
| Less: Salvage value |
| Annual depreciation --------------------------------> |
| 2. What is the |
| Accumulated depreciation ------------------------> |
| 3. What is the annual depreciation for the remaining 10 years based on the revision in life and salvage value? |
| Cost |
| Less: Accumulated depreciation |
| Book value |
| Less: Revised salvage value |
| Depreciable cost |
| Annual depreciation --------------------------------> |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education