Exercise 11-11 Machinery purchased for $ 117,600 by Tom Brady Co. in 2010 was or
ID: 2476156 • Letter: E
Question
Exercise 11-11
Machinery purchased for $ 117,600 by Tom Brady Co. in 2010 was originally estimated to have a life of 8 years with a salvage value of $ 7,840 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2015, it is determined that the total estimated life should be 10 years with a salvage value of $ 8,820 at the end of that time. Assume straight-line depreciation.
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
LINK TO TEXT
Account Titles and Explanation
Debit
Credit
Exercise 11-11
Machinery purchased for $ 117,600 by Tom Brady Co. in 2010 was originally estimated to have a life of 8 years with a salvage value of $ 7,840 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2015, it is determined that the total estimated life should be 10 years with a salvage value of $ 8,820 at the end of that time. Assume straight-line depreciation.
Explanation / Answer
A.
I do not believe that any adjusting entries will be needed
B.
Entry will be:
Cost in whole in 2010 a 1,17,600 Salvage value b 7,840 Depreciable value c = a-b 1,09,760 Depreciation per year d = c/8 13,720 Depreciation for 5 full years e = d*5 68,600 Book value at the end of 5 years f = a-e 49,000 New useful life g 10 Revised salvage value h 8,820 New depreciation value I = f-h 40,180 New depreciation per year j = i/5 8,036Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.