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Machinery purchased for $73,800 by Blossom Co. in 2013 was originally estimated to have a life...

Machinery purchased for $73,800 by Blossom Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,920 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $5,535 at the end of that time. Assume straight-line depreciation.

Prepare the entry to record depreciation for 2018

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Answer #1
Debit Credit
Depreciation expense 5043
        Accumulated depreciation 5043
Workings:
Cost 73800
Less: Salvage value 4920
Depreciable cost 68880
Divide by estimated useful life 8
Annual Depreciation 8610
Depreciation for 5 years 43050 =8610*5
Book value at the end of year 5 30750 =73800-43050
Less: Salvage value 5535
Depreciable cost 25215
Divide by remaining useful life 5
Annual Depreciation 5043
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