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?The original cost of a warehouse is 2 0 0 , 0 0 0 . ?Patty is proposing a decrease in the useful life from

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?The original cost of a warehouse is 200,000. ?Patty is proposing a decrease in the useful life from 25 ?years to 20 ?years, and a decrease in residual value from 10,000 ?to 6,000. ?Using Microsoft excel, show what the depcreciation charges will be before and after the changes are adopted if using the straight line method 10.5 ?Effects of changes in estimates on depreciation expense
At the end of each year, Patty Chu, the chief accountant at Rex Lin Enterprises, a
Singapore-based trading company, reviews long-term assets at the end of each year to
determine whether changes are called for in how these assets are depreciated. In December
2011, ?her attention focused on two assets in particular:
Patty is proposing the following changes:
For the warehouse: a decrease in the useful life to 20 ?years, and a decrease in residual
value to $6000.
For the building: an increase in the useful life to 50 ?years, and a decrease in the residual
value to $55000.
Before agreeing to the changes, Patty's bosses would like to know what the deprecia-
tion charges will be for each asset if the changes are adopted. All assets are depreciated
using the straight-line method.
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