Problem: Jerry Grant, the new controller of Blackburn Company, has received the expected useful lives and salvage values of Selected depreciable assets at the beginning of 2008. His findings are as follows:
|
Date
|
|
Accumulated
|
Useful
|
Useful
|
Salvage
|
Salvage
|
|
Asset
|
Acquired
|
Cost
|
Depreciation
|
Life (old)
|
Life (new)
|
Value (old)
|
Value (new)
|
|
Building
|
1/1/2002
|
$800,000
|
$114,000
|
40
|
50
|
$40,000
|
$37,000
|
|
Warehouse
|
1/1/2003
|
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.