Page 122 - Demo

Ch(5): Plant Assets Disposal119Exercise (5-5):Naser Company, the new controller of Salman Est, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. His finding are as follows.Type of AssetsDate AcquiredCostAccumulated Depreciation1/1/2017Useful LifeSalvage ValueOldProposedOldProposedBuilding1/1/2011800,000114,000405040,00026,000Equipment1/1/2014100,00019,00025205,0006,000All assets are depreciated by the straight-linemethod. Salman Est, uses a calendaryear in preparing annual financial statements. After discussion, management has agreed to accept Naser Company%u2019sproposed changes.Required:(a)Compute therevised annual depreciation on each assetin 2018.(b)Prepare the entries to record depreciation on the assets.