Terry Wade, the new controller of Ayayai Company, has reviewed the expected usefullives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Type of Asset Building Warehouse Date: Acquired Jan. 1, 2016 Jan. 1, 2017 Cost $800,000 100,000 Accumulated Depreciation Jan. 1, 2022 $114,750 Revised annual depreciation Compute the revised annual depreciation on each asset in 2022. Useful life (in Years) Old Proposed 40 19,200 25 Building 50 20 All assets are depreciated by the straight-line method. Ayayai Company uses a calendar year in preparing annual adjusting entries and financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life is total life, not remaining life.) Salvage Value Warehouse Old $35,000 4,000 Proposed $69,250 20,800 4
Terry Wade, the new controller of Ayayai Company, has reviewed the expected usefullives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Type of Asset Building Warehouse Date: Acquired Jan. 1, 2016 Jan. 1, 2017 Cost $800,000 100,000 Accumulated Depreciation Jan. 1, 2022 $114,750 Revised annual depreciation Compute the revised annual depreciation on each asset in 2022. Useful life (in Years) Old Proposed 40 19,200 25 Building 50 20 All assets are depreciated by the straight-line method. Ayayai Company uses a calendar year in preparing annual adjusting entries and financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life is total life, not remaining life.) Salvage Value Warehouse Old $35,000 4,000 Proposed $69,250 20,800 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Terry Wade, the new controller of Ayayai Company, has reviewed the expected usefullives and salvage values of selected depreciable
assets at the beginning of 2022. Here are his findings:
Type of Asset
Building
Warehouse
Date:
Acquired
Jan. 1, 2016
Jan, 1, 2017
Cost
$800,000
100,000
Accumulated
Depreciation
Jan. 1, 2022
$114,750
19,200
Revised annual depreciation
Compute the revised annual depreciation on each asset in 2022.
Old
Building
Useful life
(in Years)
40
25
Proposed
50
20
All assets are depreciated by the straight-line method. Ayayai Company uses a calendar year in preparing annual adjusting entries and
financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life is total
life, not remaining life.)
Salvage Value
Old Proposed
$69,250
20,800
Warehouse
$35,000
4,000
W
Transcribed Image Text:Prepare the entry to record depreciation on the building in 2022. (List all debit entries before credit entries. Credit account titles are
automatically Indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and
enter o for the amounts.)
Date Account Titles and Explanation
Dec. 31
Depletion Expense
Accumulated Depletion
Debit
Credit
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