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    Finance - Straight Line Depreciation

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    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

    Warehouse $


    Prepare the entry (or entries) to record depreciation on the building in 2008.
    Date Account / Description Debit Credit
    Dec. 31 Depreciation expense-Building
    $ 14750

    Acc. Deprec.-Building
    $ 14750

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    Solution Summary

    The solution computes revised depreciation and pass the journal entry.