Question

machinery purchased for $66,000 by Windsor Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4400 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2017, it is determined that the total estimated life should be 10 years with salvage value of $4950 at the end of that time. Assume straight line depreciation. prepare the entry to correct the prior years depreciation, if necessary.

Answer 1

		(66000-4400)/8
		7700
		orginal cost				66,000
		lessAccumulated dep (7700*5)				38500
		book value				27,500
		less revised salvage value				-4950
		cost to be depreciated				22,550
		revised useful life				5
		Depreciation expense				4510
		No journal entry for prior years
		entry for depreciation expense for current year
						Debit	Credit
		Depreciation expense				4510
		Accumulated depreciation					4510