Victor Mineli, the new controller of Santorini Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings: 

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

Instructions 

a. Compute the revised annual depreciation on each asset in 2022.

b. Prepare the entry (or entries) to record depreciation on the building in 2022.

Transcribed Image Text:

Useful Life (in years) Accumulated Depreciation, Jan. 1, 2022 Salvage Value Type of Asset Building Date Cost Old Acquired Old 40 25 Proposed Proposed Jan. 1, 2014 Warehouse Jan. 1, 2017 $700,000 $130,000 23,000 $50,000 5,000 $35,000 58 120,000 20