Terry Wade, the neW controller of Monty Company, has reviewed the expected usefullives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Accumulated Useful life Date Depreciation (in Years) Salvage Value Type of Asset Acquired Cost Jan. 1, 2022 old Proposed Old Proposed Building Jan. 1, 2016 $812,000 $115,800 40 50 $40,000 $36,200 Warehouse Jan. 1, 2017 120,000 23,100 25 20 4,500 35,400 All assets are depreciated by the straight-line method. Monty Company uses a calendar year in preparing annual adjusting entries and financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life is total life, not remaining life.) (a) Compute the revised annual depreciation on each asset in 2022. Building Warehouse Revised annual depreciation eTextbook and Media List of Accounts Save for Later (b) Prepare the entry to record depreciation on the building in 2022. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31
Terry Wade, the neW controller of Monty Company, has reviewed the expected usefullives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: Accumulated Useful life Date Depreciation (in Years) Salvage Value Type of Asset Acquired Cost Jan. 1, 2022 old Proposed Old Proposed Building Jan. 1, 2016 $812,000 $115,800 40 50 $40,000 $36,200 Warehouse Jan. 1, 2017 120,000 23,100 25 20 4,500 35,400 All assets are depreciated by the straight-line method. Monty Company uses a calendar year in preparing annual adjusting entries and financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life is total life, not remaining life.) (a) Compute the revised annual depreciation on each asset in 2022. Building Warehouse Revised annual depreciation eTextbook and Media List of Accounts Save for Later (b) Prepare the entry to record depreciation on the building in 2022. (List all debit entries before credit entries. 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 O for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Terry Wade, the neW controller of Monty Company, has reviewed the expected usefullives and salvage values of selected
depreciable assets at the beginning of 2022. Here are his findings:
Accumulated
Useful life
Date
Depreciation
(in Years)
Salvage Value
Type of Asset
Acquired
Cost
Jan. 1, 2022
old Proposed
Old
Proposed
Building
Jan. 1, 2016
$812,000
$115,800
40
50
$40,000
$36,200
Warehouse
Jan. 1, 2017
120,000
23,100
25
20
4,500
35,400
All assets are depreciated by the straight-line method. Monty Company uses a calendar year in preparing annual adjusting entries
and financial statements. After discussion, management has agreed to accept Terry's proposed changes. (The "Proposed" useful life
is total life, not remaining life.)
(a)
Compute the revised annual depreciation on each asset in 2022.
Building
Warehouse
Revised annual depreciation
eTextbook and Media
List of Accounts
Save for Later
(b)
Prepare the entry to record depreciation on the building in 2022. (List all debit entries before credit entries. 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 O for the amounts.)
Date Account Titles and Explanation
Debit
Credit
Dec. 31
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