Question

Exercise 11-16 Machinery purchased for $49,400 by Indigo Corp. on January 1, 2015, was originally estimated to have an 8-year useful life with a residual value of $3,000. Depreciation has been entered for five years on this basis. In 2020, it is determined that the total estimated useful life (including 2020) should have been 10 years, with a residual value of $4,000 at the end of that time. Assume straight-line depreciation and that Indigo Corp. uses IFRS for financial statement purposes.

Prepare the entry that is required to correct the prior years’ depreciation, if any. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
no entry
no entry

Prepare the entry to record depreciation for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Repeat part (b) assuming Indigo Corp. uses ASPE and the machinery is originally estimated to have a physical life of 8.5 years and a salvage value of $0. In 2020, it is determined that the total estimated physical life (including 2020) should have been 11 years, with a salvage value of $100 at the end of that time. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Repeat part (b) assuming Indigo Corp. uses the double-declining-balance method of depreciation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

Answer 1

Below answer based on Straight Line basis with revised estimated life and salvage value , All are formula driven

Any doubt please drop message  

Machinery purchased($)	49,000
Purchased date	Jan'1-2015
Useful life	8 Year
Residual value $	3,000
Straight line Depreciation$
(49000-3000)/8year	5,750
Accumulated depreciation$ - 5 Year ( 2015-2020)	28,750
($5750 per year dep*5)
Book Value ( after 5 Year- 2o2o) $	20,250
( $49000- $28750)
Revised Unseful life	10
Balance Life Year	5
( Revised useful life - Earlier 5 year)
( 10 year - 5 year)
Residual Value ( $)	4,000
( as per Question)
Revised Book Value ( as above)	20,250
Straight line Depreciation$	3,250
(20250-4000)/5year

NO Journal Entries relates to Priror Period as per IFRS
As per IFRS , Prior period Income and Expenses is prohibited to disclose
in the financial .
We can only disclose any prior period item as Retrospective basis ( last 3 Years)
Prepare JE year 2020	Debit($)	Credit($)
Depreciation Expenses	3,250
Accumulated Depreciation		3,250