Question

Required information [The following information applies to the questions displayed below.) Wardell Company purchased a mainframe on January 1, 2019, at a cost of $54,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $3,600. Required: 1. Prepare the year-end journal entry for depreciation in 2021. No depreciation was recorded during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answer to nearest whole dollar.) View transaction list Journal entry worksheet < 1 > Record depreciation expense for 2021. Note: Enter debits before credits. General Journal Debit Credit Event 1 Record entry View general journal Clear entry

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Answer 1

Depreciation before revision:

= ($54,000 - $6,000) / 5

= $9,600

Book value on Jan 1, 2021:

= $54,000 - ($9,600 X 2)

= $34,800

Revised useful life is 10 years from 2019. 2 years are over from 2019 to 2020. Remaining useful life 8 years (ie. 10 - 2 = 8 years)

Depreciation in 2021:

= ($34,800 - $3,600) / 8

= $3,900

Event	General Journal	Debit	Credit
1	Depreciation expense	$3,900	-
	Accumulated depreciation	-	$3,900