Question

Exercise 9-6 Victor Mineli, the new controller of Cullumber Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings: Type of Asset Date Acquired Cost Accumulated Depreciation, Jan. 1, 2017 Useful Life (in years) Salvage Value Old Proposed Old Proposed Building Jan. 1, 2009 $814,500 $149,500 40 48 $67,000 $36,800 Warehouse Jan. 1, 2012 123,000 23,680 25 20 4,600 3,800 All assets are depreciated by the straight-line method. Cullumber 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.) Compute the revised annual depreciation on each asset in 2017. (Round answers to 0 decimal places, e.g. 125.) Building Warehouse Revised annual depreciation $enter a dollar amount $enter a dollar amount LINK TO TEXT Prepare the entry to record depreciation on the building in 2017. (Round answers to 0 decimal places, e.g. 125. 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 0 for the amounts.)

Answer 1

1
	Building	Warehouse
Cost	814500	123000
Less: Accumulated depreciation	149500	23680
Book value	665000	99320
Less: Salvage value	36800	3800
Depreciable cost	628200	95520
Revised remaining useful life in years	40	15
Revised annual depreciation	15705	6368
2
	Debit	Credit
Dec. 31     Depreciation Expense	15705
Accumulated Depreciation—Buildings		15705