Flint Co. purchased equipment for $601,800 which was estimated to have a useful

Question

Flint Co. purchased equipment for $601,800 which was estimated to have a useful life of 10 years with a salvage value of $11,400 at the end of that time. Depreciation has been entered for 7 years on a straight-line basis. In 2018, it is determined that the total estimated life should be 15 years with a salvage value of $4,400 at the end of that time. (a) (b) Prepare the entry (if any) to correct the prior years' depreciation. Prepare the entry to record depreciation for 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

Accumulated depreciation for 7 years=(601800-11400)/10*7= $413280 Book value at the end of 7 year=601800-413280= $188520 a NO entry 0 NO entry 0 b Depreciation expense 23015 =(188520-4400)/8         Accumulated depreciation 23015

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