Brett Richard, the new controller of Maldonado Company, has reviewed the expected useful lives

Brett Richard, the new controller of Maldonado Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2012. Here are his findings:

Accumulated          Useful Life

Type of                Date                                   Depreciation        (in years)                              Salvage Value

Asset               Acquired             Cost              Jan. 1, 2012         Old         Proposed            Old         Proposed

Building        Jan. 1, 2004      $947,850           $176,260            40                50                 $49,170    $35,430

Warehouse Jan. 1, 2007      $144,050              42,080             25                 20                    6,200          4,540

All assets are depreciated by the straight-line method. Maldonado Company uses a calendar year in preparing annual financial statements. After discussion, management has agreed to accept Brett’s proposed changes.

 Required:

  1. a)           Compute the revised annual depreciation on each asset in 2012.
  2. b)            Prepare the entry to record depreciation on the building in 2012.
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