Danny Venable, the new controller of Seratelli Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2014. Here are his findings:

Accumulated Useful Life Type of Date Depreciation, (in years) Salvage Value Asset Acquired Cost Jan. 1, 2014 Old Proposed Old Proposed Building Jan. 1, 2006 $700,000 $130,000 40 48 $50,000 $35,000 Warehouse Jan. 1, 2009 120,000 23,000 25 20 5,000 3,600 All assets are depreciated by the straight-line method. Seratelli Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Danny’s proposed changes. (The “Proposed” useful life is total life, not remaining life.)

Instructions

(a) Compute the revised annual depreciation on each asset in 2014. (Show computations.)

(b) Prepare the entry (or entries) to record depreciation on the building in 2014.

AppendixLO1