Exercise 9-6 http://edugen.wileyplus.com/edugen/art2/common/pixel.gif Brett Richard, the new controller of Maldonado Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2012. Here are his findings: Type of Date Accumulated Depreciation, Useful Life (in years) Salvage Value Asset Acquired Cost Jan. 1, 2012 Old Proposed Old Proposed Building Jan. 1, 2004 $868,000 $160,950 40 48 $63,250 $35,930 Warehouse Jan. 1, 2007 167,200 32,314 25 20 5,630 5,060 All assets are depreciated by the straight-line method. Maldonado Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Brett’s proposed changes. (The “Proposed” useful life is total life, not remaining life.) a. Compute the revised annual depreciation on each asset in 2012. (Round answers to 0 decimal places, e.g. 125.) b. Prepare the entry (or entries) to record depreciation on the building in 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 9-6

Brett Richard, the new controller of Maldonado Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2012. Here are his findings:

Type of		Date				Accumulated Depreciation,		Useful Life (in years)				Salvage Value
Asset		Acquired		Cost		Jan. 1, 2012		Old		Proposed		Old		Proposed
Building		Jan. 1, 2004		$868,000		$160,950		40		48		$63,250		$35,930
Warehouse		Jan. 1, 2007		167,200		32,314		25		20		5,630		5,060

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

 

a.       Compute the revised annual depreciation on each asset in 2012. (Round answers to 0 decimal places, e.g. 125.)

b.      Prepare the entry (or entries) to record depreciation on the building in 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

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