1.
No entry required to correct the prior year's depreciation, changes are only made in the current year not for the prior year.
2.
Old depreciation expense per year = (Cost - Salvage value) / Years
= ($60,600 - $4,040) / 8
= $7,070
Accumulated depreciation for 5 years = $7,070 * 5
= $35,350
Carrying value at the beginning of 2021 = Cost - Accumulated depreciation
= $60,600 - $35,350
= $25,250
Remaining years = 10 - 5
= 5 years
Depreciation expense for 2021 = (Carrying value - Salvage value) / Remaining years
= ($25,250 - $4,545) / 5 years
= $4,141
Accounts titles and explanation | Debit | Credit |
Depreciation expense - | $4,141 | |
...Accumulated depreciation | $4,141 | |
(To record the depreciation expense) |
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