QUESTION: A company has a building with a cost of $500,000 and accumulated depreciation of $100,000. The company estimated the useful life of the building to be 25 years and the residual value to be $50,000. What would be the journal entry to record the revised estimate of useful life to 30 years?

Answer: The journal entry would be: Depreciation expense (expense) - $10,000 (($500,000 - $50,000 - $100,000) / 30 years) Accumulated depreciation (contra-asset) - $10,000

Here's the tabulated working calculation for the journal entry to record the revised estimate of useful life:

To record the revised estimate of the useful life of the building, we need to adjust the depreciation expense and accumulated depreciation accounts. The revised depreciation expense can be calculated as follows:

Depreciation expense = (Cost - Residual value - Accumulated depreciation) / Revised useful life

Depreciation expense = ($500,000 - $50,000 - $100,000) / 30 years = $10,000 per year

We need to debit the depreciation expense account for $10,000 and credit the accumulated depreciation account for the same amount.

The journal entry to record the revised estimate of the useful life of the building would be:

Debit depreciation expense (expense) - $10,000

Credit accumulated depreciation (contra-asset) - $10,000