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Wardell Company purchased a mini computer on January 1, 2019, at a cost of $32,350. The computer has been depreciated using the straight-line method over an estimated five-year useful life with an estimated residual value of $3,100. On January 1, 2021, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $930.

Required:
1. Prepare the appropriate adjusting entry for depreciation in 2021 to reflect the revised estimate. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the appropriate adjusting entry for depreciation in 2021 to reflect the revised estimate, assuming that the company uses the sum-of-the-years'-digits method instead of the straight-line method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations and round your final answers to nearest whole dollar.)

Answer 1

1) Accumulated depreciation (2019 to 2020) = (32350-3100/5)*2 = 11700

Revised depreciation = (32350-11700-930)/8 = 2465

date	account and explanation	Debit	Credit
Dec 31,2021	Depreciation expense	2465
	Accumulated depreciation-Mini Computer		2465
	(To record Dep)

2) Accumulated depreciation (2019 to 2020) = (32350-3100)*9/15 = 17550

Revised depreciation = (32350-17550-930)*8/36 = 3082

date	account and explanation	Debit	Credit
Dec 31,2021	Depreciation expense	3082
	Accumulated depreciation-Mini Computer		3082
	(To record Dep)