Question
Lindy Weink, the new controller of Ivanhoe Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2021.
Lindy Weink, the new controller of Ivanhoe Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2021. (Depreciation for 2021 has not been recorded yet.) Her findings are as follows:
Total Useful Life in Years
Residual Value
Type of Asset Date Acquired Cost Current Proposed Current Proposed
Building Jan. 1, 2006 $800,500 20 30 $39,880 $60,100
Equipment Jan. 1, 2019 125,210 5 4 4,510 3,500
After discussion, management agrees to accept Lindys proposed changes. All assets are depreciated by the straight-line method. Ivanhoe Company has a December 31 year end.
For each asset, calculate the annual depreciation expense using the original estimated useful life and residual value.
Annual depreciation expense | ||
---|---|---|
Building | ||
Equipment |
Calculate the carrying amount of each asset as at January 1, 2021.
Carrying amount | ||||||||||||
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Building |
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Equipment
For each asset, calculate the revised annual depreciation expense and the carrying amount at December 31, 2021.
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