value 3.00 points Wardel Company purchased a minicomputer on January 1, 2014, at
ID: 2396545 • Letter: V
Question
value 3.00 points Wardel Company purchased a minicomputer on January 1, 2014, at a cost of $40,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residuall value of $4,000. On January 1, 2016, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $400 1. Prepare the appropriate adjusting entry for depreciation in 2016 to reflect the revised estimate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record depreciation expense. Note: Enter debits before credits. vent Credit Record entry Clear entry View general journal 2. Prepare the appropriate adjusting entry for depreciation in 2016 assuming that the company uses the sum-of-the-years digits method instead of the straight-line method (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) O Type here to searchExplanation / Answer
1) Original depreciation = (40000-4000/5) = 7200 per year
Revised depreciation = (40000-14400-400)/8 = 3150 per year
1) Original accumlated depreciation =
Sum of year digit = 5+4+3+2+1 = 15 (40000-4000*9/15) = 21600
Revised sum of year digit = 8+7+6+5+4+3+2+1 = 36
Revised depreciation for 2016 = (40000-21600-400)*8/36 = 4000
Date accounts & explanation debit credit 2016 Depreciation expense 3150 Accumlated depreciation 3150 (To record depreciation expense)Related Questions
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