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Problem 1: Tuff Hardware Consultants purchased a building for $1,098,000 and depreciated it on a? straight-line basis over a 40?-year period. The estimated residual value is $98,000. After using the building for 15? years, Tuft realized that wear and tear on the building would wear it out before 40 years and that the estimated residual value should be $86,000. Starting with the 16th? year, Tuft began depreciating the building over a revised total life of 35 years using the new residual value. Journalize depreciation expense on the building for years 15 and 16. ?
Financial Statement Analysis and Preparation
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