(Solution) - In 1992 Lincoln Company completed the construction of a buildin -(2025 Original AI-Free Solution)

Paper Details

In 1992, Lincoln Company completed the construction of a building at a cost of $4,000,000 and first occupied it in January 1995. It was estimated that the building will have a useful life of 40 years and a salvage value of $200,000 at the end of that time.
Early in 2002, an addition to the building was constructed at a cost of $1,500,000. At that time it was estimated that the remaining life of the building would be, as originally estimated, an additional 32 years, and that the addition would have a life of 32 years, and a salvage value of $20,000.
In 2016, it is determined that the probable life of the building and addition will extend to the end of 2054 or 10 years beyond the original estimate.

Instructions
(a) Using the straight-line method, compute the annual depreciation that would have been charged from 1995 through 2001.
(b) Compute the annual depreciation that would have been charged from 2002 through 2015.
(c) Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2016.
(d) Compute the annual depreciation to be charged beginning with 2016.