Question

On July 1, 2019, Cullumber Company purchased new equipment for $95.000. Its estimated useful life was 5 years with a $12,000 salvage value. On December 31, 2022, the company estimated that the equipment's remaining useful life was 10 years, with a revised salvage value of $5,000. (a) ✓ Your answer is correct. Prepare the journal entry to record depreciation on December 31, 2019. (Credit account titles are automatically indented when 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 Depreciation Expense 7300 Accumulated Depreciation Equipment 7300 e Textbook and Media List of Accounts ✓ Your answer is correct Prepare the journal entry to record depreciation on December 31, 2020. (Credit account titles are automatically indented when amount is entered Do not indent morally freentry is nouired select "No Entry for the grount titles and enter for the amounts. Account Titles and Explanation Debit Credit Depreciation Expense 14.00 Accumulated Depreciation Equipment | 34500 e Textbook and Media List of Accounts Your answer is incorrect Compute the revised annual depreciation on December 31, 2022. Ravised annual depreciation S

Answer 1

Depreciation per year = (85000-12000)/5 years =14,600 Accumulated depr. Till Dec. 31, 2021 = $14,600 x 2.5 years = 36,500 Revised annual depreciation on Dec. 31, 2022 = (85,000-36,500-5,000)/(10-2.5 years) =5,800 Answer: 5,800