Question

Ac 313

Exercise 20-17 Change in estimate; useful life and residual value of equipment (LO20-4) Wardell Company purchased a mini computer on January 1, 2016, at a cost of $46,800. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $4,800. On January 1, 2018, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $600. eBook Print Required: 1. Prepare the appropriate adjusting entry for depreciation in 2018 to reflect the revised estimate. 2. Prepare the appropriate adjusting entry for depreciation in 2018 to reflect the revised estimate. Assuming that the company uses the sum-of-the-years-digits method instead of the straight-line method. References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate adjusting entry for depreciation in 2018 to reflect the revised estimate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar.) View transaction list

Answer 1

a) Journal entry

Revised Depreciation = (46800-16800-600)/8 = 3675

Event	General Journal	Debit	Credit
1	Depreciation expense	3675
	Accumulated depreciation-equipment		3675
	(To record dep)

b) Journal entry

Revised Depreciation = (46800-25200-600)*8/36 = 4667

Event	General Journal	Debit	Credit
1	Depreciation expense	4667
	Accumulated depreciation-equipment		4667
	(To record dep)