In 1998, Tamarisk Company completed the construction of a building at a cost of $2,320,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of $68,800 at the end of that time. Early in 2009, an addition to the building was constructed at a cost of $580,000. 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 $23,200. In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate. (a) (b). (c) Your answer is partially correct. Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2027. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Depreciation Expense Accumulated Depreciation - Buildings Debit 92,000 Credit 92,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In 1998, Tamarisk Company completed the construction of a building at a cost of $2,320,000 and first occupied it in January 1999. It
was estimated that the building will have a useful life of 40 years and a salvage value of $68,800 at the end of that time.
Early in 2009, an addition to the building was constructed at a cost of $580,000. 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 $23,200.
In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the
original estimate.
(a)
(b).
(c)
Your answer is partially correct.
Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2027. (If no entry is
required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually. List debit entry before credit entry.)
Account Titles and Explanation
Depreciation Expense
Accumulated Depreciation - Buildings
Debit
92,000
Credit
92,000
Transcribed Image Text:In 1998, Tamarisk Company completed the construction of a building at a cost of $2,320,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of $68,800 at the end of that time. Early in 2009, an addition to the building was constructed at a cost of $580,000. 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 $23,200. In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate. (a) (b). (c) Your answer is partially correct. Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2027. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List debit entry before credit entry.) Account Titles and Explanation Depreciation Expense Accumulated Depreciation - Buildings Debit 92,000 Credit 92,000
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