Reference no: EM133132910

Question - In 1993, Herman Moore Company completed the construction of a building at a cost of $2,000,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $60,000 at the end of that time.

Early in 2004, an addition to the building was constructed at a cost of $500,000. 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 $20,000.

In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053 or 20 years beyond its original estimate.

Required -

a) Using the straight-line method, compute the annual depreciation that would have been charged from 1994 through 2003.

b) What entry should be made in 2021 to record the replacement of the roof?

c) Prepare the entry in January 2021 to record the revision in the estimated life of the building.

d) What amount of depreciation should be charged for the year 2021?