Problem - Jack Reese, the new controller of Muckenthaler Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2010. Here are his findings:
Accumulated
Useful Life
Type of Date Depreciation, (in years)
Salvage Value
Asset
Acquired
Cost
Jan. 1, 2010
Old
Proposed
Old
Proposed
Building Jan. 1, 2002 $905,170 $178,520 40 50 $40,530 $36,290
Warehouse Jan. 1, 2005 163,180 32,450 25 20 5,750 4,340
All assets are depreciated by the straight-line method. Muckenthaler Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Jack's proposed changes. (The "Proposed" useful life is total life, not remaining life.)
(a) Compute the revised annual depreciation on each asset in 2010. (Round to 0 decimal places, i.e. 2,350.)
(b) Prepare the entry to record depreciation on the building in 2010.