Machinery purchased for $72,000 by Buffalo Co. in 2013 was originally estimated

Question

Machinery purchased for $72,000 by Buffalo Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,800 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $5,400 at the end of that time. Assume straight-line depreciation Prepare the entry to correct the prior year's depreciation, if necessary. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Credit SHOW LIST OF ACCOUNTS LINK TO TEXTLINK TO TEXT Prepare the entry to record depreciation for 2018. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.) Account Titles and Explanation Credit

Explanation / Answer

1 No entry No entry 2 Accumulated depreciation till 2018 = (72000-4800)/8*5= 42000 Book value in 2018 = 72000-42000 = 30000 Entry: Depreciation expense 7320 =(42000-5400)/5          Accumulated depreciation 7320

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.