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Fix-It Hardware purchased a building for $454,100 and depreciated it on a straight-line basis over a 35 year period. The estimated residual value is $105,780.

After using the building for 15 years, Fix-It Hardware realized that wear and tear on the building would wear it out before 35 years and that the estimated residual value should be $88,320.

Starting with the 16th year, Fix-it Hardware began depreciating the building over a revised total life of 20 years using the new residual value.

*Round all values to the nearest whole number.

Straight-line

Straight-line Method = `(` Cost `-`  Residual Value`)`  `/`  Time `=`  Depreciation per year

Straight-line Method = `(` $ `-`  $ `)`  `/`  `=`  $ per year

Accumulated depreciation after 15 years

Depreciation X Years = Amount after 15 years

$ X `=`  $

Book value after 15 years

Cost `-`  Accumulated Depreciation `=`  Book Value

$ `-`  $ `=`  $

Revised depreciation

Straight-line Method = `(` Book Value `-`  Residual Value`)`  `/`  Time `=`  Depreciation per year

Straight-line Method = `(` $ `-`  $ `)`  `/`  `=`  $ per year

Journalize depreciation expense on the building for years 15 and 16.

Journal
DateDescriptionDebitCredit
Year 15
Year 15
Year 16
Year 16