Exercise 11-11 (Part Level Submission) Machinery purchased for $73,800 by Monty
ID: 2543562 • Letter: E
Question
Exercise 11-11 (Part Level Submission)
Machinery purchased for $73,800 by Monty 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.
(a)
Account Titles and Explanation
Debit
Credit
LINK TO TEXT
LINK TO TEXT
SAVE FOR LATER
SUBMIT ANSWER
(b)
Account Titles and Explanation
Debit
Credit
LINK TO TEXT
LINK TO TEXT
SAVE FOR LATER
SUBMIT ANSWER
Exercise 11-11 (Part Level Submission)
Machinery purchased for $73,800 by Monty 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.
(a)
Your answer is partially correct. Try again. Prepare the entry to correct the prior year's depreciation, if necessary. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and Explanation
Debit
Credit
LINK TO TEXT
LINK TO TEXT
Attempts: 1 of 2 usedSAVE FOR LATER
SUBMIT ANSWER
(b)
Prepare the entry to record depreciation for 2018. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.)Account Titles and Explanation
Debit
Credit
LINK TO TEXT
LINK TO TEXT
Attempts: 0 of 2 usedSAVE FOR LATER
SUBMIT ANSWER
Explanation / Answer
(a)
No entry is required to correct the prior years depreciation.
(b)
Depreciation under Straight line method = (cost - salvage value) / useful life
= (73,800 - 4,920) / 8
= 8,610
Accumulated depreciation from 2013 to 2017 = 8,610 * 5 years = 43,050
Carrying value at the beginning of 2018 = Cost - Accumulated depreciation = 73,800 - 43,050 = 30,750
Revised useful life = 10 years
Revised salvage value = 5,535
Remaining useful life = 10 - 5 = 5 years
Depreciation under Straight line method from the year 2018 = (carrying value - salvage value) / useful life
= (30,750 - 5,535) / 5
= 5,043
Depreciation for the year 2018 = 5,043
Depreciation expense 5,043 Accumulated depreciation 5,043Related Questions
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