In 1993, Windsor Company completed the construction of a building at a cost of $2,160,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $65,600 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $540,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $21,600. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In 1993, Windsor Company completed the construction of a building at a cost of $2,160,000 and first occupied it in January 1994. It
was estimated that the building will have a useful life of 40 years and a salvage value of $65,600 at the end of that time.
Early in 2004, an addition to the building was constructed at a cost of $540,000. At that time, it was estimated that the remaining life
of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a
salvage value of $21,600.
In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the
original estimate.
(a)
Your answer is correct.
Using the straight-line method, compute the annual depreciation that would have been charged from 1994 through 2003.
Annual depreciation from 1994 through 2003
2$
/ yr.
52360
eTextbook and Media
List of Accounts
Transcribed Image Text:In 1993, Windsor Company completed the construction of a building at a cost of $2,160,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $65,600 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $540,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $21,600. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate. (a) Your answer is correct. Using the straight-line method, compute the annual depreciation that would have been charged from 1994 through 2003. Annual depreciation from 1994 through 2003 2$ / yr. 52360 eTextbook and Media List of Accounts
(d)
Compute the annual depreciation to be charged, beginning with 2022. (Round answer to 0 decimal places, e.g. 45,892.)
Annual depreciation expense-building
$
eTextbook and Media
List of Accounts
Transcribed Image Text:(d) Compute the annual depreciation to be charged, beginning with 2022. (Round answer to 0 decimal places, e.g. 45,892.) Annual depreciation expense-building $ eTextbook and Media List of Accounts
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