iesoy Intermediate Accounting, 16e Help .BACKE CALCULATOR -INTE. VERSON Exercise

Question

iesoy Intermediate Accounting, 16e Help .BACKE CALCULATOR -INTE. VERSON Exercise 11-11 Machinery purchased for $51,200 by Shamrock Co. in 2013 was originally estimated to have a ife of t8 basis. In 2018, it is deternoned that the total estimated d 'e should be 0 years with a salvage value of $4,590 at tbe end of that time. Assume straaght Ine deprecation. nepare the entry to correct the F ryear's depreciat n·necessary (1, no entry is require automatically indented when anouimt is entered. Do not indent maally.) select "No etry for the arvont titles ond enter 0 for the amoens om a acmint title are Tnles and Ixplanation Debia Credit Prepare the entry to record depreciation for 2018. (If o entry is required, select "No entry"for the accouot titfs and enter o foe the amounts Credit amount is entered. Do not indent manually,. Use Machinery related account.) aot reldes sind eeter o for the amounts Credit accountks are atomalnnted wheon Account Titles and Explanation Debit Click if you would like to Show Work for this question: Open Show. Work

Explanation / Answer

1). There is no correction needed.

2). Entry to record depreciation:-

Depreciation charged in past years = ($61200 - $4080 ) / 8 years = $7140.
Depreciation for 5 year already charged = $7140 * 5 = $35700.

Now balance of asset in beginning of 2018 = $61200 - $35700 = $25500.
Revised Salvage = $4590
Balance life revised = 5 years.
Depreciation to be charged = ($25500 - $4590) / 5 years = $4182.

Account Titles Debit Credit Depreciation expense $4182    Accumulated Depreciation $4182

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