Reference no: EM13827228
In 1987, Herman Moore Company completed the construction of a building at a cost of $2,660,000 and first occupied it in January 1988. It was estimated that the building will have a useful life of 40 years and a salvage value of $79,800 at the end of that time.
Early in 1998, an addition to the building was constructed at a cost of $665,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $26,600.
In 2016, it is determined that the probable life of the building and addition will extend to the end of 2047, or 20 years beyond the original estimate.
a) Using the straight-line method, compute the annual depreciation that would have been charged from 1988 through 1997.
b) Compute the annual depreciation that would have been charged from 1998 through 2015.
c) Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2016
d) Compute the annual depreciation to be charged, beginning with 2016
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: In 1987, Herman Moore Company completed the construction of a building at a cost of $2,660,000 and first occupied it in January 1988. It was estimated that the building will have a useful life of 40 years and a salvage value of $79,800 at the end of ..
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