Arcadia HS, purchased equipment for $510,000 which was estimated to have a useful life of 10 years with a residual value of $10,000 at the end of that time. Depreciation has been recorded for 7 years on a straight-line basis. In 2014 (year 8), it is determined that the total estimated life should be 15 years with a residual value of $5,000 at the end of that time.
What is the journal entry to correct
the prior years’ depreciation?
Calculate the depreciation expense
for 2014.
Homework Answers
b) Accumulated depreciation = (510000-10000)/10*7 = 350000
Revised depreciation = (510000-350000-5000)/8 = 19375
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