Question

Recording Entry for a change in Estimate Exon Company purchased equipment for $160,000 on January 1, 2018. The equipment has an estimated residual value of $4,800 and an estimated useful life of 8 years. The company depreciates the equipment using the straight-line method. On January 1, 2021, the company determines that the total useful life is 6 years and the estimated residual value is $1,600. Required Prepare the entry to record depreciation expense for 2021. Date Account Name Dec 31, 2021 Dr. Cr. >

Answer 1

Calculation Of Depreciation and journal entry Cost Less: residual value Depreciable Value Estimated life Depreciation $ $ $ $ 1,60,000 4,800 1,55,200 8 19,400 $ $ After using 3 years Book value after 3 years use =160000-(19400*3) $ 1,01,800 Depreciation for January 2021 Book value Less: residual value Depreciable Value Estimated life Depreciation for Dec 2021 $ $ $ 1,01,800 1,600 1,00,200 3 33,400 $ Cr. Date Account Name Dec 31, 2021 Depreciation Expenses A/C To Accumulated Depreciation Dr. $ 33,400 $ 33,400 * Kindly Comment down for any clarifications/ queries and please upvote.