Question

Machinery purchased for $69,000 by Vaughn Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,600 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,175 at the end of that time. Assume straight-line depreciation. Prepare the entry to correct the prior years' depreciation, if necessary. (If no entry is required, select "No entry"for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit List of Accounts Prepare the entry to record depreciation for 2021. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.) Account Titles and Explanation Debit Credit

Answer 1

	orginal depreciation expense
	(69000-4600)/8
	8050
	Depreciation expense for 2021
	original cost				69,000
	Accumulated dep		8050*5		40250
	Book value in year 2021				28,750
	Revised salvage value				-5,175
	Depreciable cost				23,575
	Revised useful life		(10 -5)		5
	Depreciation expense for 2021				4715
1)	Account titles & Explanations					Debit	credit
	No Entry
2)	Account titles & Explanations					Debit	credit
	Depreciation expense					4,715
	Accumulated depreciation-machine						4,715