Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assetť's life, and create the journal entry for year five.

Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assetť's life, and create the journal entry for year five.

Name: Original CostPOST....Accumulated Depreciation for Previous YearsDATED
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Description: Original CostPOST....Accumulated Depreciation for Previous YearsDATEDESCRIPTIONREF.DEBITCREDIT...Book Value, Beginning Year 4120xx...Salvage Value22....Revised Remaining Depreciation Cost3...4Revised Useful Life15 YEARSRevised Depreciation, TotalRev

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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