(Learning Objective 3: Change a plant asset’s useful life) Fresno Consultantspurchased a building for $440,000 and depreciated it on a straight-line basis over 40 years. Theestimated residual value was $82,000. After using the building for 20 years, Fresno realized thatthe building would remain useful only 14 more years. Starting with the 21st year, Fresno begandepreciating the building over a revised total life of 34 years and decreased the residual value to$14,600. Record depreciation expense on the building for years 20 and 21.
(Learning Objective 3: Change a plant asset’s useful life) Fresno Consultantspurchased a building for $440,000 and depreciated it on a straight-line basis over 40 years. Theestimated residual value was $82,000. After using the building for 20 years, Fresno realized thatthe building would remain useful only 14 more years. Starting with the 21st year, Fresno begandepreciating the building over a revised total life of 34 years and decreased the residual value to$14,600. Record depreciation expense on the building for years 20 and 21.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Learning Objective 3: Change a plant asset’s useful life) Fresno Consultants
purchased a building for $440,000 and
estimated residual value was $82,000. After using the building for 20 years, Fresno realized that
the building would remain useful only 14 more years. Starting with the 21st year, Fresno began
depreciating the building over a revised total life of 34 years and decreased the residual value to
$14,600. Record depreciation expense on the building for years 20 and 21.
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