Question

iew Policies how Attempt History Current Attempt in Progress Machinery purchased for $48,600 by Sheffield 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 $3.500 at the end of that time. Assume straight-line depreciation and that Sheffield Corp. uses IFRS for financial statement purposes. (a) Your answer is correct. Prepare the entry that is required to correct the prior years' depreciation, if any.(Credit occount 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 for the amounts.) Account Titles and Explanation Debit Credit No Entry No Entry

need answer to part c

Answer 1

Purchase price = $48,600

Physical life = 8.5 years

Salvage value = 0

Depreciation per year = Purchase price / Physical life = $48,600 / 8.5 years = $5,717.6 or $5,718 (rounded off to nearest dollar).

Depreciation from 2015 to 2019 = Depreciation per year * 5 years = $5,718 * 5 years = $28,590

Remaining value to be depreciated = Purchase price - Depreciation from 2015 to 2019 = $48,600 - $28,590 = $20,010

Salvage value = $100

Total life = 11 years

Remaining life = 6 years ( 11- 5 )

Depreciation to be recorded from 2020 = ( Remaining value to be depreciated - Salvage value ) / Remaining life = ( $20,010 - $100 ) / 6 years = $3,318.33 or $3,318 per year.

Account Titles and Explanation	Debit	Credit
Depreciation Expense	$3,318
Accumulated Depreciation - Machinery		$3,318