In January 2013, the company purchased equipment for $10,000. The equipment has a useful life of 10

Question:

In January 2013, the company purchased equipment for $10,000. The equipment has a useful life of 10 years with $0 expected salvage value. The company uses straight-line depreciation. The company mistakenly failed to record depreciation expense on this equipment. Make the necessary correcting entry, assuming that

(1) The error was found in May 2015 after the 2014 books had been closed

(2) The error was found in May 2016 after the 2015 books had been closed. Ignore income taxes.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...