Victor Mineli, the new controller of Crane Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings:Type ofAsset DateAcquired Cost AccumulatedDepreciation,Jan. 1, 2022 Useful Life (in years) Salvage Value Old Proposed Old ProposedBuilding Jan. 1, 2014 $737,000 $134,400 40 58 $65,000 $36,700Warehouse Jan. 1, 2017 121,000 23,290 25 20 4,550 5,100All assets are depreciated by the straight-line method. Crane Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor’s proposed changes. (The “Proposed” useful life is total life, not remaining life.)1. Compute the revised annual depreciation on each asset in 2022.2. Prepare the entry to record depreciation on the building in 2022.

SOLUTION 1- Building Cost = $737000 Accumulated depreciation = $134400 Cost at the beginning…

Answered: Victor Mineli, the new controller of…

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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Victor Mineli, the new controller of Crane Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings:

Type of Asset	Date Acquired	Cost	Accumulated Depreciation, Jan. 1, 2022	Useful Life (in years)	Salvage Value
		Old	Proposed	Old	Proposed
Building	Jan. 1, 2014	$737,000	$134,400	40	58	$65,000	$36,700
Warehouse	Jan. 1, 2017	121,000	23,290	25	20	4,550	5,100

All assets are depreciated by the straight-line method. Crane Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Victor’s proposed changes. (The “Proposed” useful life is total life, not remaining life.)

1. Compute the revised annual depreciation on each asset in 2022.

2. Prepare the entry to record depreciation on the building in 2022.

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