Alteran Corporation purchased office equipment for $1.4 million in 2013 The equi

Question

Alteran Corporation purchased office equipment for $1.4 million in 2013 The equipment is being depreciated over a 8-year life using the sum-of-the-years' digits method. The residual value is expected to be $500,000. At the beginning of 2016, Alteran decided to change to the straight-ine depreciation method for this machine Required Prepare the 2016 depreciation adjusting entry (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 entry for 2016. Note: Enter debits before credits Event General Journal Debit Credit Depreciation expense Accumulated depreciation Record entry Clear entry View general journal

Explanation / Answer

Adjusting entry :

Sum of year digit = 8+7+6+5+4+3+2+1 = 36

Depreciation 2013 to 2015 = (1400000-500000*21/36) = 525000

Depreciation for 2016 = (1400000-500000-525000)/5 = 75000

Event General journal debit credit 1 Depreciation expense 75000 Accumlated depreciation 75000 (To record depreciation expense)

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