Question1:

Mike Geary, the controller of Shellhammer Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2022. Here are his findings:

Type of Asset	Date Acquired	Cost	Accumulated Depreciation, Jan. 1, 2022	Useful Life (in Years)			Salvage Value
				Old		Proposed	Old	Proposed
Building	Jan. 1, 2014	$2,700,000	$516,000	40	50		$120,000	$84,000
	Jan. 1, 2017	240,000	46,000	25	20		10,000	8,000

All assets are depreciated by the straight-line method. Shellhammer Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Mike'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. (Show computations.)

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