Jerry Grant, the new controller of Blackburn Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2008. His findings are as follows.
Accumulated Useful Life
Type Date Depreciation in Years Salvage Value
of Asset Acquired Cost 1/1/08 Old Proposed Old Proposed
Building 1/1/02 $800,000 $114,000 40 50 $40,000 $37,000
Warehouse 1/1/03 100,000 19,000 25 20 5,000 3,600
All assets are depreciated by the straight-line method. Blackburn Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Jerry's proposed changes.
Compute the revised annual depreciation on each asset in 2008.
Building $ 14750
Prepare the entry (or entries) to record depreciation on the building in 2008.
Date Account / Description Debit Credit
Dec. 31 Depreciation expense-Building
The solution computes revised depreciation and pass the journal entry.