Mike Devereaux Company shows the following entries in its Equipment account for 2015. All amounts are based

Question:

Mike Devereaux Company shows the following entries in its Equipment account for 2015. All amounts are based on historical cost.

Instructions
(a) Prepare any correcting entries necessary.
(b) Assuming that depreciation is to be charged for a full year on the ending balance in the asset account, compute the proper depreciation charge for 2015 under each of the methods listed below.
Assume an estimated life of 10 years, with no salvage value. The machinery included in the January 1, 2015, balance was purchased in 2013.
(1) Straight-line.
(2)Sum-of-the-years€™-digits.

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...