Question

Machinery purchased for $68,400 by Bramble Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,560 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,130 at the end of that time. Assume straight-line depreciation.

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

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

Prepare the entry to record depreciation for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 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	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

cost - $68400 useful life = Syears. Sawage value = $4560 $68400- $4560 Annual depreciation = = 7980 [year. Asset is depreciated for 5 years so the Acumulated depreciation will be 7980 X5 =$39900 Book value at the end of sth year = $68400-39900 =$28500 - useful life changed from 8 years to 10 years => Remaining useful life is 5 years. [5 years already completedy Salvage value = $5130. New depreciation D . = $28500-$5130 $285000 $5130, $4674 lyear o 'No enly" to corred previous year's depreciation. credit. ☺ Deprecation Accumulated depreciation Bebit $4674 Les . $4674